See if you qualify for an interest-free student loan.

Since 1 April 2006, if you've lived in New Zealand for 6 months (183 days) or more, your student loan is interest-free. This means interest is charged to your loan and written off daily.

You'll see the interest charges and interest write-offs on your statement.

The interest rate for the 2011 tax year is 6.6% and remains the same for the 2012 tax year.

How interest is calculated

If you're not eligible for an interest free loan, compound interest will be charged and applied to your loan balance on 31 March each year. Compound interest means the daily interest is calculated on both the principal and any interest calculated already. Repaying your loan before you travel or making extra payments whilst overseas can make a big difference to the amount of compound interest charged.

How to get an interest-free student loan

If you've been in New Zealand for 6 months (183 days) you don't need to do a thing - your loan will be interest-free. The interest on your loan will automatically be written off.

What happens to the interest on your loan if you go overseas

If you've qualified for an interest-free student loan, you can travel overseas for up to 6 months (183 days) and your loan will still be interest-free. Please be aware though, that your loan will only be interest-free if you stay in New Zealand for at least 32 consecutive days when you get back.

Find out more about what happens when you're away for 6 months or more.

What to do after you've been overseas

If you return to New Zealand after being away for 6 months or more, your loan will become interest-free again once you've been back for 6 months. Give us a call as soon as you're back and we'll make sure your interest is written off from the day you got back. Go to "Contact us".

While you're waiting for your 6 months to clock up, you can still take a short trip overseas. From the day you first return to New Zealand, you can travel overseas for up to 31 days in total without affecting your eligibility for an interest-free loan.

It's a good idea to carefully count your travel days - if you leave for 32 days or more a new 6 month qualifying period will start from the day you arrive back in New Zealand.

We share information with New Zealand Customs

We share information with the New Zealand Customs Service to help us work out if you're eligible for an interest-free student loan.

Inland Revenue and Customs have met the conditions of an information matching programme under the Privacy Act 1993, and have the approval of the Office of the Privacy Commissioner.

Please remember that if you're going to be overseas for more than 6 months, you're still legally required to let us know you'll be out of the country.

It is your right to challenge any information you receive from us through the information matching programme. If you have any concerns or questions about this, please go to "Contact us" for details.