By The Chipkie Team, Personal Finance Editorial Team · Last updated 25 October 2026
When lending money to family overseas, “I’ll pay back what you sent” can mean different things to each person. Is the debt fixed in Australian dollars, or in the currency the borrower receives? Who bears transfer fees and the effect of an exchange rate moving before repayment?
Decide those terms before sending money. Choosing a transfer provider handles the movement of funds; agreeing the debt currency and repayment credit handles the family’s separate obligation.
Key Takeaways
- State the currency in which the debt is owed, rather than recording a number without a currency.
- Agree who pays sender, intermediary and receiving fees and how those fees affect credited repayments.
- Specify the exchange-rate source and date if a payment needs conversion for the loan record.
- Cross-border legal and tax questions require advice relevant to both countries.
Which currency should the family debt use?
The agreement should identify one clear debt currency and explain how payments in another currency will reduce that debt. A loan fixed in Australian dollars places exchange-rate changes differently from a loan fixed in the borrower’s currency. Neither choice removes the risk, so work through a small example together before agreeing.
Moneysmart’s overseas transfer guidance, updated 17 September 2026, explains that providers set exchange rates and charge fees. Your provider’s transfer quote does not by itself define what your relative promises to repay.
| Hypothetical loan choice | What stays fixed | What can change |
|---|---|---|
| AUD debt | The borrower owes AUD $5,000 principal, regardless of the initial amount received in New Zealand dollars. | The NZD needed for each AUD repayment can rise or fall as the agreed conversion rate changes. |
| NZD debt | The borrower owes NZD $5,500 principal, even if the lender originally used AUD $5,000 to fund it. | The AUD value the lender eventually receives can change with the conversion rate and agreed fees. |
All exchange rates below are hypothetical illustrations, not current quotes. At an assumed rate of AUD $1 = NZD $1.10, AUD $5,000 converts to NZD $5,500 before fees. That initial equivalence does not make the two possible loan currencies interchangeable later.
Our guide to transfers and personal loan records explains why the movement of money and the underlying promise should be documented separately.
How should fees and exchange rates affect repayments?
Agree whether a repayment is credited at the gross converted amount or the net amount actually received, and who bears each fee. If conversion is required, identify a verifiable rate source and relevant date. Keep provider receipts and bank evidence so both people can reproduce the credited amount instead of guessing.
Hypothetical AUD debt: the debt begins at AUD $5,000. At an assumed AUD $1 = NZD $1.25, a NZD $1,250 repayment converts to AUD $1,000 before fees. Suppose an AUD $10 receiving fee is deducted and the agreement credits the net amount received.
| AUD debt calculation | Amount |
|---|---|
| Converted repayment before fee | AUD $1,000 |
| Receiving fee | AUD $10 |
| Repayment credited under net-receipt terms | AUD $990 |
| Remaining principal | AUD $5,000 − AUD $990 = AUD $4,010 |
If the lender instead agreed to bear that fee and credit AUD $1,000, the remaining debt would be AUD $4,000. Neither treatment should be a surprise after payment.
Hypothetical NZD debt: the principal is NZD $5,500 and the borrower repays NZD $1,100. If those terms credit the full NZD amount, principal falls to NZD $4,400. At the assumed AUD $1 = NZD $1.25 rate, that repayment converts to AUD $880 before fees, without changing the NZD principal calculation.
What should your overseas loan worksheet include?
Record the parties, debt currency, actual advance, payment method, conversion rule and fee allocation in language both people understand. Keep a dated ledger in the debt currency with supporting transfer evidence. Before relying on the arrangement, obtain advice about relevant legal, tax and recovery questions in Australia and the borrower’s country.
| Term to discuss | Decision to record |
|---|---|
| Principal and currency | Use the currency code and amount. Explain whether the initial transfer costs are paid separately or form part of the genuinely agreed advance. |
| Repayment expectation | Amount, dates, frequency and any agreed interest. Identify the currency of each obligation rather than assuming the currency symbol is enough. |
| Conversion evidence | Actual provider conversion or another specified source, relevant date and how to handle a non-business day or unavailable quote. |
| Fees and shortfalls | Who pays each known fee, how unexpected deductions are checked and whether a short payment leaves a balance to reconcile. |
| Receipt and timing | When payment counts under the agreement, how the recipient confirms receipt and how to record delays, rejected transfers or returned funds. |
| Advice and changes | Relevant countries and advisers, any unresolved questions and the process for recording a later agreed change without rewriting the original history. |
AUSTRAC distinguishes physical cross-border money declarations from transfers through a bank or money transfer business. Keep these questions separate:
- Physical money: carrying or sending cash and relevant instruments across a border can involve declaration requirements. Check the official rules for the actual method you plan to use.
- Bank or remittance transfer: do not apply physical-cash rules as a universal personal reporting threshold for electronic transfers. Providers may request information; answer accurately and never split transactions to avoid reporting.
- Private loan evidence: keep the agreement and receipts needed to explain the genuine purpose. A provider’s compliance questions and your contractual repayment calculation are different records.
Can you simply use today’s exchange rate?
Only if that fits the conversion method both people agreed and you can verify the relevant quote. A public rate may differ from the provider’s actual rate and fees. Record the source, date and calculation, then reconcile the money received rather than silently choosing whichever rate favours one person.
Does an Australian agreement guarantee overseas recovery?
No. A written agreement does not guarantee that a debt can be enforced or recovered in another country. Local law, jurisdiction, language and practical costs can matter. Obtain advice about both countries before relying on a template, especially where the amount is significant or the borrower has no Australian assets.
Does Chipkie send or convert the loan money?
Chipkie does not send, convert or hold the funds. Use an appropriate bank or transfer provider for the payment and keep its receipts separately. Before choosing a recording tool, check how you will represent the agreed currency and calculations without assuming it offers a particular multi-currency or remittance feature.
How can you prevent a currency disagreement?
Agree the debt currency, test the conversion and fee rules with a small hypothetical repayment, and retain the evidence of every actual transfer. If either person cannot explain the remaining balance, clarify the terms before sending more. Cross-border tax advice belongs alongside that planning, rather than being inferred from a transfer receipt.
For context on interest records, see our family loan interest and tax reporting guide. For an appropriate arrangement, you can create a clear loan record with Chipkie after confirming the relevant terms and advice.
Disclaimer: The information provided in this article is for general informational purposes only and does not constitute financial, legal, or tax advice. Australian laws and lending criteria vary by state and territory and may change. Always consult a licensed financial adviser, solicitor, or conveyancer before entering into any financial arrangement or property purchase with another party.
