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Student loans Ngā pūtea tarewa ākonga

Student loan interest rates

If you're a New Zealand-based borrower your student loan is interest free. You'll still see interest on your loan, but we write this off. If you're an overseas-based borrower we'll charge interest on your student loan.

Working out interest on a student loan

We work out interest on your daily loan balance using the current interest rate.

Your daily loan balance will change each time you:

  • make a repayment, or
  • apply another loan transaction to your account.

Interest rates for student loans

A review of student loan interest rates happens each year. If a new interest rate applies, it will be effective from 1 April.

The table below has the interest rates for the current and previous tax years.

Tax year Interest rate
1 April 2019 to 31 March 2020 4.0%
1 April 2018 to 31 March 2019 4.3%
1 April 2017 to 31 March 2018 4.4%
1 April 2016 to 31 March 2017 4.8%

Late payment interest on student loans

Late payment interest is different to student loan interest, this interest isn't written off.

It's important to make your repayments before the due dates. This will help you avoid having late payment interest charged on unpaid amounts of $334 or more.

We'll charge late payment interest and add it to your unpaid amount from the day after the due date. We'll continue to add it monthly until you've paid the full amount. This will include any late payment charges.

We work out the late payment interest charge based on:

  • the loan interest rate for the tax year, plus
  • 4% calculated as a monthly rate.

The table below has the rate of late payment interest charges for the current and previous tax years.

Tax year Rate of late payment interest charge
1 April 2019 to 31 March 2020 8.0% calculated as a monthly rate of 0.643%
1 April 2018 to 31 March 2019 8.3% calculated as a monthly rate of 0.666%
1 April 2017 to 31 March 2018 8.4% calculated as a monthly rate of 0.674%
1 April 2016 to 31 March 2017 8.8% calculated as a monthly rate of 0.705%

If you miss a payment contact us as soon as you can

The sooner you contact us the less interest you might have to pay.

Reduced late payment interest rate

You might be able to arrange an instalment arrangement if you've missed any payments. If we accept this arrangement, we'll charge late payment interest at the reduced rate on amounts of $334 or more for each month you keep to the arrangement.

For any months you don't keep to the arrangement, we'll charge late payment interest at the full rate. The reduced late payment interest rate is 2% lower than the late payment interest rate.

The table below has the rate of reduced late payment interest for the current and previous tax years.

Tax year Rate of reduced late payment interest
1 April 2019 to 31 March 2020 6.0% calculated as a monthly rate of 0.486%
1 April 2018 to 31 March 2019 6.3% calculated as a monthly rate of 0.510%
1 April 2017 to 31 March 2018 6.4% calculated as a monthly rate of 0.518%
1 April 2016 to 31 March 2017 6.8% calculated as a monthly rate of 0.550%

Annual administration fee

An annual administration fee of $40 applies to your account if your student loan balance is $20 or more at 31 March. The administration fee reflects our costs in administering your student loan.