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Understanding your student loan

With University starting soon the process can be rather overwhelming and when pay-off-student-loan
you need to apply for a student loan it can become even more daunting. Monteck Carter is all about making life easier for people and we know the terminology associated with Student Loans can be a bit confusing so here’s a quick breakdown explaining the top three.

New Zealand-based borrower

What does this mean?

What does this mean to you?

Someone who has been living in New Zealand for six months (183 days) or more (and hasn’t been out of New Zealand for more than 31 days during the 183 day period), or who has been granted approval to be treated as a New Zealand-based borrower. You pay interest on your loan but it’s written off each day you’re New Zealand-based.

Your repayments are based on the type of income you receive and the amount.

Overseas-based borrower

What does this mean?

What does this mean to you?

Someone who has been overseas for six months (184 days) or more (and hasn’t returned to New Zealand for more than 31 days in the 184 day period). You pay interest on your loan.

Your repayments are based on your loan balance and are due in two equal instalments.

Repayment Holiday

What does this mean?

What does this mean to you?

A period of up to one year (365 days) during which overseas-based borrowers don’t have a repayment obligation to pay. Borrowers need to apply for a repayment holiday. You still pay interest on your loan even when you’re on a repayment holiday.

You’re not required to make repayments for up to one year (365 days).

You’ll need to apply before you leave New Zealand or within the first six months (183 days) of being overseas.

 

If you need more information on how your student loan might affect your tax situation please feel free to contact Monteck Carter on 09 273 3682

** Source:  IRD Website