How Do You Pay Student Loans While Working Abroad? 

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Educational loans help a student to cover partial or full expenses incurred while studying abroad. However, an education loan just like any other loan needs to be repaid. Repayment is a must irrespective of the country the student has moved to. The best time to repay an education loan is while you are working abroad. Students who are living abroad for more than 3 months need to contact their Student Loans Company(SLC) for the repayment of debts. It will help to start the loan repayment procedure.

Loan repayment policies differ based on the country. Hence, it is best to know the steps to repay student loans while working abroad.  Keep reading to know about the benefits of education loans, loan repayment policies, student loan working abroad calculator, and more.

Benefits of Education loan

At times the family’s income and resources are not sufficient to cover the cost of education. In such circumstances, banks and financial institutions (NBFC) lend education loans to help a student cover their expenses. The education loan helps the student to cover partly or fully the expenses. The student who has taken an education loan is guaranteed that his/her expenses will be covered. Some of the expenses covered include tuition fees, living expenses, travel expenses, and other miscellaneous expenses.

Loans are considered bad debts. As the value of things bought out of loan diminishes over time. However, education is considered an investment. Due to the education, the student is likely to earn more than he/she has borrowed.

Repayment Policies of Loan

The Loan repayment policies differ based on the country the student has moved to. Below we have listed the country-specific loan requirements. Do note that the rules and policies change. Hence, it is always best to connect with the official websites to stay updated.


Those who have a UK student loan and are living and working abroad need to repay the loans. This repayment has to be done as if the student is living in the UK itself. When the salary of the student has crossed a certain amount the repayment has to be done. In the UK this amount is  £18,935 for the students who have begun their studies before September 1, 2012 (Plan 1).  For those who have started their course later, the amount is £25,725 (Plan 2). For postgraduate students, the salary amount is £21,000.

The repayment of student loans while working abroad in the U.K. is straightforward. For a smooth process, the individual needs to provide correct information to the U.K. employer. Once, this is done the loan money gets deducted from the paycheck. 

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The education loans need to be repaid even if the student lives and works abroad. Graduating students are immediately enrolled in the standard repayment plan. Another way to repay the student loan working abroad is by qualifying for income-driven repayment plans. 

There are mainly four income-driven repayment plans. Income-based repayment (IBR), income-contingent repayment (ICR), Pay As You Earn (PAYE), and revised pay as you earn (REPAYE) plan. These repayment plans are based on the income and the family size of the individual. Thus, it can help to lower the monthly payments.


Those with a government student loan can apply for the Repayment Assistance Plan or RAP. Another way to repay the student loan working abroad is with the help of the Repayment Assistance Plan for Borrowers with Disabilities (RAP-D). Depending on the income, the individual can qualify for a reduction in the amount of debt. However, to stay eligible for these plans the student needs to reapply every six months. 

Once, eligible the government of Canada will assist the student with the repayment by paying the interest on the outstanding loan and by paying down the interest and the principal amount after 60 months of RAP.  To apply for RAP documentation of income and expenses have to be provided.

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The Australian repayment of student loans working abroad is a must. The repayment of the loan can be made if the salary exceeds the minimum repayment threshold. The repayment threshold varies depending on where you’re living and working

To repay the Australian loans, the borrower needs to update the contact details, submit overseas travel notifications, and lodge worldwide income. The repayment amount can be calculated in the following way. That is the repayment income × the applicable repayment rate = compulsory repayment.  

New Zealand 

Students living outside New Zealand for less than 6 months are considered to be New Zealand citizens themselves. Hence, they are eligible for interest-free loans. The student loan working abroad has to be repaid if your income exceeds the minimum repayment threshold. The repayment threshold is based on income and is adjusted annually.  

Those who are away from New Zealand for more than 6 months are required to pay the interest. However, repayment can be made after 1 year. Interest will be charged. Hence, voluntary repayment is the best idea. Education loans may be interest-free for some students away from New Zealand.

Maximum Education Loan Available For Study Abroad

Will Your Student Loan Be Written Off When You’re Living Abroad?

No. The student loan will not be written off even if you are living abroad. The student loan wiped off after 3 years is a myth. The Education loan taken by the student does not end even if the student has moved abroad. Student loan for working abroad needs to be paid. In case, the loan is deferred then a penalty will be imposed. The penalty will be a fixed monthly payment instead of the normal monthly repayment amount. The penalty amount is higher than the payment would generally have to make.

Can You Move to Another Country With Student Debt?

Yes. Students are free to move to another country with education debt. Private lenders do not place location restrictions while providing education loans. However, this doesn’t mean that the individual is free of debt. The student loan working abroad can be paid no matter where you are living. 

How to Avoid Student Loan Default If You Move Abroad?

 To start repaying student loans when you move overseas it is important to ensure that you don’t fall back on education loans. For this, the student can first update the details with the Student Loans Company(SLC).  Next, set up an autopay of the student loan working abroad. Consequently, the loans can be paid off without missing a due date.

In order to ensure that after setting up the autopay the loan provider does not withdraw from the home account connect the international bank account with the home account. Most importantly, make sure that you don’t default on student loans. It might be tempting to forget about student loans. However, make sure you pay your debts. As they are going nowhere unless you make the payment.


How to get an education loan for abroad studies without collateral?

A student can get INR 7.5 lakh education loan from public banks in India. For study abroad INR 40 lakh without collateral is provided by private banks. Several NBFCs also offer study abroad education loans without collateral.

What happens with your student loan when you’ve been living abroad for 5 years?

Nothing happens! The student loans still have to be paid irrespective of the time period. The only difference will be the amount you have left to pay. That is if you have started paying your educational debt.

Can I get a 100% loan to study abroad?

Yes. It is possible to get a 100% education loan to study abroad.

There is no running away from education loans. Student loan while working abroad has to be repaid to the bank or NBFC. The education loan repayment policies are different for every country. A student can follow the repayment policy of the county he/she has taken the loan. Moreover, the student needs to ensure that no default is made on the loan repayment. Skipping loan repayment will only come off as a greater amount that you would have to pay later. Hence, it is best to repay the loan on time. Need help related to education loans? Visit Fly Finance now!

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