overseas, student loan, and other

[p2r]

If you set up a business before you study, all your costs would be tax deductable. You would build up a big tax loss and any future profit would get deducted off that until paid off.

Got to wonder if getting a NZ degree and student loan is a good idea in 2013.

Some smart people send their kids to Aussie for tertary ed.

I think UK you have to be resident 3 years before you are not considered a overseas student. Even if have uk passport.

[Pumice]

I need some ideas on how to deal with my student loan and investment funds. Since we left NZ a little under two years ago we have managed to accrue about $150k (NZD) in spare funds that isn’t earning much interest over here in Aus. I was thinking about a couple of options a) buying an investment property outright (Wanganui/Palmy area – if that’s still possible) or b) buying an investment property and clearing my student loan by putting it on the mortgage ($50k NZD) which would then effectively allow my student loan interest to become tax deductable (Mortgage rates are roughly the same, if not slightly less than my S/L interest)

We could substitute property for stocks or any other leveraged investment. P.s so we don’t get sidetracked in the morality/ethical debate over paying my student loan off now/faster, assume the funds are 100% my girlfriends who no longer has a S/L. I am currently paying my loan down at around $15k (NZD) p.a before interest. If that makes any difference.

What are people thoughts? Also note that there is currently a 10% bonus on S/L payments until April 1.

Cheers.


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[Corporate]

I don't think you should bring property into the equation, there are just too many unknowns. I would just be looking simply at what total returns you earn on the funds in Australia, compared to, the interest accruing on the structure loan and the opportunity cost of missing out on the repayment bonus.

Personally I wouldn't go near property in Palmy or Wanganui.

I borrowed as much money as I could under my student loan knowing it was interest free. My loan started at $45k and 6 years later (December 2012) it was down to $14k. As I am heading to the UK shortly, and because the voluntary repayment bonus finishes on 31 March, I paid off the remaining balance this month.

[buns]

I'd pay the whole loan off right away as the costs on that exceed what you get from the bank and then just carry on as you are. You aren't far off finishing with your loan, so won't get enough benefit from the tax idea you through up.

You can get about 4.5% risk free in Aussie right? That compounded will most probably exceed any growth scenarios you run on Palmy/Wanganui property.

[CJ]

Since you are oversea, paying interest, and the 10% repayment bonus ends soon, I would repay before end of March.

As a taxpayer, I recommend you pay in full in April

[Pumice]

Cheers guys. I'm not so keen on property as it is.

I can also access my Kiwisaver account since I have been out of NZ for more than 12 months. My gf will do the same and chuck it on my S/L. that should all but wipe it out. I'm not sure if we get the government portion though, would seem a bit rough (on NZ taxpayers) to pay off with S/Loan with taxpayer dollars and recieve a 10% bonus as well.