How New Zealand Student Loan Repayments Work
New Zealand student loans work very differently depending on where you live. NZ-based borrowers have had interest-free loans since 1 April 2006 — every dollar you repay reduces your principal, nothing more. You repay 12% of every dollar you earn above the annual threshold of $24,128 (2025-26), deducted automatically through PAYE. Overseas-based borrowers lose interest-free status and instead pay a fixed annual amount based on their loan balance, with interest accruing at a rate set by IRD each April.
📝 NZ-Based Repayment Thresholds (2025-26)
| Pay Period | Threshold |
|---|---|
| Annual | $24,128 |
| Monthly | $2,010.67 |
| Fortnightly | $928 |
| Weekly | $464 |
Repayment rate: 12% of every dollar earned above the threshold for your pay period, on income from your main job (tax code with "SL").
✈️ Overseas-Based Borrower Rules
You become overseas-based if you're outside New Zealand and don't spend at least 32 days in NZ within any rolling 184-day period. Once overseas-based, interest is charged on your loan at 5.6% per year (rate as at April 2026, reviewed annually), plus a $40 annual administration fee. Instead of income-based repayments, you must pay a fixed minimum amount based on your loan balance, generally in two instalments on 31 March and 30 September.
| Loan Balance | Minimum Annual Repayment |
|---|---|
| Up to $15,000 | $1,000 |
| $15,001 – $30,000 | $2,000 |
| $30,001 – $45,000 | $3,000 |
| $45,001 – $60,000 | $4,000 |
| Over $60,000 | $5,000 |
💡 Example Calculations
NZ-based: $25,000 loan, $65,000 income. Annual repayment: ($65,000 − $24,128) × 12% = $4,904.64/year (about $408.72/month). Since there's no interest, the $25,000 loan is repaid in a little over 5 years at this rate.
Overseas-based: Same $25,000 loan balance falls in the "$15,001–$30,000" band, so the minimum repayment is $2,000/year. At 5.6% interest, the loan accrues about $1,400 in interest the first year — meaning only around $600 goes toward principal that year.
Note: These are simplified examples. Actual IRD assessments account for exact dates, instalment timing, and balance changes throughout the year.
⚠️ Important Notes
- This calculator provides estimates only and assumes constant annual income and a fixed loan balance-based repayment tier throughout.
- Real IRD assessments consider exact departure/return dates, instalment timing (31 March / 30 September for overseas-based borrowers), and adjust the tier if your balance moves into a new band.
- It does not account for repayment holidays, hardship provisions, secondary income, or the Fees Free scheme.
- Late payment interest (a separate, higher rate) applies to overdue amounts and is not modelled here.
- For official figures and to check your actual balance, use Inland Revenue (IRD) – Student Loans.
- Interest rates and thresholds are reviewed annually and may change.