Kiwis living in Australia and the UK trying to make the most of their qualifications represent a pretty big group of people and many of them have student loans to contend with. Just like any other debt, a student loan is not something you want to be shackled to for any length of time – especially when the interest starts accumulating. The sooner you can get rid of the burden, the better off you’ll be, so you can get on with your life without the stress of being in debt.
Four things to remember about New Zealand student loans, especially if you’re overseas:
1. Any student loan with a balance of over $20 will attract an administration fee from the IRD every single year. If you’ve got a loan with a small balance, get it paid down as fast as possible. It’s not worth accruing additional debt if you only owe a few hundred dollars.
2. If you’re overseas for more than half of the tax year, then you can expect your student loan to attract interest. As with any interest the rate fluctuates, but the fact is that if you’re in Australia and still holding a student debt in NZ, it won’t take long before it really starts to mount up. Make sure you budget for regular repayments out of your overseas salary.
3. Early repayments don’t attract any penalties at all from the IRD, so it is a very easy debt to resolve compared to some others, as many lenders will charge you early termination fees on other types of debt.
4. If you owe less than $1000 at the end of the NZ Financial Year, you are obligated to pay the loan in full. If you don’t you can look forward to interest and administration fees.
How to pay your loan back if you’re overseas
The Inland Revenue Department offers a number of options for people to make payments on their student loan in New Zealand while they’re overseas. Unfortunately many of them are time consuming and very expensive.
Choosing to remit funds to the IRD by credit or debit card can attract significant fees. Using Australian Internet banking is always an option, but it is likely to attract fees of up to $50 by the time it gets to the IRD. So while it’s convenient, it is also very expensive.
Another option that the Inland Revenue Department in New Zealand recommends for paying off your New Zealand student loan, is to use an online money transfer service. This will generally always work out to be the cheapest and fastest option. OrbitRemit offers free payments to the IRD and you can do it all by a domestic bank transfer in Australia. We will also have the funds with the IRD on the same business day that they clear for us in Australia. We can help you set up automatic payments or direct debits for your Inland Revenue Account, so that making payments to the IRD on time becomes one less task you have to worry about.
So if you’re in Australia and concerned about your New Zealand student loan commitments, then head on over to our IRD NZ student loan payments and see how we can help.