On Becoming An Overseas Based Borrower - What Do You Need to Know?
If you are overseas for more than 6 months (184 days continuously) then there are three main differences from the rules for domestic based borrowers: you get charged interest, your obligation doesn't get deducted from your salary automatically, and the amount you owe is calculated on the size of your loan and not your income.
You can apply for a one-year repayment holiday (note that interest is still charged so you might want to consider making payments you can afford anyway). The application needs to be made before you leave or within six months of leaving. Apply through myIRD. Register via http://www.ird.govt.nz/online-services/ir-online-services-register.html.
Payments are due in equal payments on 30 September and 31 March. If you haven't paid what you owe on this date you get automatically charged "late payment interest". This is compounding so adds up quickly. We really recommend setting up regular payments; it gets rid of all the hassle.
Repayments are fee-free for you, and can be any amount through NZForex. Sign up for NZForex through the students.org.nz website.
How much to pay?
The amount due is based on the size of the loan. The amounts are as follows:
If your total loan balance is You have to pay
Less than $1000 The total owing
>$1000 and <$15000 $1000
>$15000 and <$30000 $2000
You can check the size of your loan (for repayments it's the amount on 31 March that matters) through the myIR website (https://www2.e-services.ird.govt.nz/secure/login.html).
If you cannot meet the payment then you can apply for hardship. IRD can set a different repayment obligation. This doesn’t avoid either the loan or the interest, the amount that you don't pay gets added to your balance and you'll have to pay it later, with interest. You apply by contacting the IRD call-centre, talking it through and supplying the documentation that they require, it's different depending on your circumstances.
Does anyone not have to pay interest?
There is some provision for some people who are overseas to be treated as domestic based borrowers. See details at: http://www.ird.govt.nz/studentloans/overseas/interest-free/ mostly these are for those in full-time study, and this is the reason that you went overseas, if you are working for the New Zealand Government, a New Zealand-based business or an approved charity.
You apply for this provision by writing to:
PO Box 432
You will need to include copies of any documentation that you are relying upon.
Contact the New Zealand Union of Students' Associations
Dr Alistair Shaw