Paying off your New Zealand student loan from overseas


We’ve been there. Borrowing money for study is all fun-and-games until it comes time to paying it back! We’re here to give you a bit of a briefing on paying back your student loans. Plus, we’ll tell you how we can help.
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Student Loans in New Zealand: The Basics

For New Zealand citizens (and residents in specific circumstances), getting a loan just requires you to study an approved course run by an approved education provider. If you’re a New Zealand-based borrower, the interest on your student loan is written off by the Inland Revenue Department (IRD). If you’re an overseas-based borrower, the IRD will charge interest on your loan (the rate until 31 March 2018 is 4.4%).

You need to repay your loan from overseas

Even if you are based abroad, you are required to pay a certain amount of your student loan each year. How much depends on how much you still have left to pay of course!

Many people choose to pay in regular instalments, but if you are not doing this then be aware that you are required to have paid half of your annual repayment by 31 March, and the other half by 30 September.

How much you need to pay

If you don’t know how much you still owe, then you can find out by logging into your myIR Secure Online Services account on the IRD website.

The table below shows how much you need to repay for the biannual deadlines:

When your loan balance is… 30 September 31 March
under $1,000 you need to pay your whole loan balance
$1,000 and up to $15,000 $500 $500
over $15,000 and up to $30,000 $1,000 $1,000
over $30,000 and up to $45,000 $1,500 $1,500
over $45,000 and up to $60,000 $2,000 $2,000
over $60,000 $2,500 $2,500

Source: http://www.ird.govt.nz/studentloans/overseas/managing/student-loan-paying-off-overseas.html (Accurate as of 19 March 2018)

Avoid late fees – or even jail!

If you miss the payment deadlines then the IRD may charge late payment interest, and this year they have been cracking down on non-paying overseas-based borrowers. Australia borrowers take note – the IRD have been co-operating with the Australian Taxation Office (ATO) to get contact information!

Recently, a small number of borrowers who have refused to pay their New Zealand student loans have even been arrested when returning from overseas (you can read more on the NZ Herald website here). While only a small number of people have been arrested, those who refuse to pay are taking a risk.

The best way to avoid this situation is to ensure that you are up to date with your payments, which will keep your loan manageable too. Even 4.4% interest can add up over time, thanks to the effect of compounding.

If you’re having difficulty repaying your loan then contact the IRD to discuss payment options

Okay, So How do I Pay?

The good news is that OrbitRemit makes it really easy for you to pay down your student loan. As a proudly Kiwi owned business we have a great deal with the IRD to allow students to pay back their student loans FEE FREE, regardless of the amount sent.

Just give us your IRD number and the amount you wish to pay. You’ll then need to send us the funds in your local currency. That’s it! We make sure that payments to the IRD are done in the same working day, and acknowledge the receipt of your payment so you don’t have to worry about it being late. You can also set up a regular payment through us, so your loan will basically pay itself off!

Either sign up on the OrbitRemit website or download our app via the following links to get started:

 



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