UK Student Loan Repayment Calculator
Calculate your monthly repayments for Plan 1, 2, 4, 5 and Postgraduate loans based on 2026/27 thresholds
Repayment Schedule by Plan
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Estimated Years to Repayment
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* Estimates assume constant salary and current interest rates. Actual repayment periods may vary.
Plan Comparison at Your Salary
See how different loan plans would affect your repayments at your current salary level.
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Key Differences
Should You Overpay Your Student Loan?
Overpaying only makes sense if you would otherwise repay your loan in full before the write-off date.
When Overpaying Makes Sense
- You have a small remaining balance that you could clear within a few years
- You earn significantly above average and expect continued high earnings
- You are close to full repayment and want to clear the debt
- Your projected lifetime repayments exceed your outstanding balance
When You Should Not Overpay
- You have a large balance relative to your income
- You earn around or below average salary
- You would prefer to use extra funds for pension contributions
- You have higher-interest debt to clear first
- Your loan will likely be written off before you repay in full
Understanding UK Student Loan Repayments: Your Complete Guide
Navigating the UK student loan system can feel overwhelming, with five different repayment plans, varying thresholds, complex interest calculations, and write-off dates spanning decades into the future. Whether you graduated with a Plan 1 loan before 2012, took out a Plan 2 loan between 2012 and 2023, or are among the first cohort entering repayment under Plan 5, understanding exactly how much you will repay each month is essential for effective financial planning. This comprehensive guide explains everything you need to know about UK student loan repayments, helping you calculate your monthly deductions, understand interest accumulation, and determine whether overpaying makes financial sense for your situation.
The UK student loan system operates fundamentally differently from conventional debt. Your repayments are calculated as a percentage of income above a threshold rather than based on your outstanding balance. This income-contingent approach means your monthly payments automatically adjust as your earnings change, providing built-in protection during periods of lower income while ensuring higher earners contribute more towards their education costs. Most importantly, all student loans are eventually written off after a set period, regardless of how much remains outstanding.
The Five UK Student Loan Repayment Plans Explained
The UK currently operates five distinct student loan repayment plans, each with different thresholds, interest rates, and write-off periods. Which plan you are on depends primarily on when you started your course, where you studied, and whether your loan was for undergraduate or postgraduate study. Understanding your specific plan is the essential first step in calculating your repayments accurately.
Plan 1 applies to students who started undergraduate courses in England and Wales before September 2012, students who started courses in Northern Ireland at any point, and those with older loans from England, Wales, or Northern Ireland. Plan 2 covers English and Welsh students who started undergraduate courses between September 2012 and July 2023. Plan 4 is specifically for Scottish students who took out loans from the Student Awards Agency Scotland. Plan 5 represents the newest repayment plan, applying to students starting courses in England from August 2023 onwards. Additionally, Postgraduate Loans have their own separate repayment structure regardless of when you studied.
Current Repayment Thresholds for 2026/27
Repayment thresholds determine the income level at which student loan deductions begin. From April 2026, the thresholds for the 2026/27 tax year have been confirmed for most plans. Plan 1 graduates will start repaying once they earn above £26,900 annually, equivalent to £2,242 monthly or £517 weekly. This represents an increase from the previous year's threshold and is designed to account for inflation.
Plan 2 thresholds have been set at £29,385 annually for 2026/27, which translates to £2,449 monthly or £565 weekly. Notably, the government has announced that Plan 2 thresholds will be frozen at this level until April 2030, meaning no inflation adjustments will occur during this period. This freeze effectively reduces the real value of the threshold over time, resulting in higher total repayments for Plan 2 borrowers.
Plan 4 borrowers in Scotland benefit from a significantly higher threshold of approximately £33,880 annually for 2026/27, making it the most generous repayment threshold currently available. Plan 5, the newest plan, has a threshold of £25,000 annually, the lowest among undergraduate plans. Postgraduate loan holders face the lowest threshold at £21,000 annually, meaning repayments begin at relatively modest income levels.
Higher thresholds mean you keep more of your salary before repayments begin. A Plan 4 borrower earning £35,000 pays significantly less each month than a Plan 5 borrower on the same salary, despite potentially having similar loan balances.
How Repayment Calculations Work
Student loan repayments are calculated as a percentage of income exceeding your plan's threshold, not as a percentage of your total earnings or your outstanding balance. For Plan 1, Plan 2, Plan 4, and Plan 5 loans, the repayment rate is 9% of income above the threshold. Postgraduate loans use a separate 6% rate. If you have both an undergraduate and postgraduate loan, you make separate repayments on each, but the calculations use the same income figure.
Consider a graduate earning £40,000 annually on Plan 2 with a threshold of £29,385. Their income above the threshold is £10,615, and 9% of this amount equals £955.35 annually, or approximately £79.61 per month. If the same graduate also has a postgraduate loan with a £21,000 threshold, they would additionally pay 6% of £19,000, which is £1,140 annually or £95 monthly. Their combined monthly repayments would total approximately £174.61.
Understanding Multiple Loan Plans
Many graduates find themselves with loans under multiple repayment plans, particularly those who completed undergraduate study before 2023 and later pursued postgraduate qualifications. The interaction between plans can be confusing, but the rules are designed to ensure you only make one set of undergraduate repayments at a time while postgraduate loans are handled separately.
If you have multiple undergraduate loans across different plans, such as Plan 1 and Plan 2, you repay 9% of income above the lowest threshold out of all your plans. However, you make only a single undergraduate repayment each month, which is then allocated between your plans. The Student Loans Company determines how repayments are split between your different loan accounts.
Postgraduate loans operate independently. If you have both undergraduate and postgraduate loans, you pay 9% above your undergraduate threshold plus 6% above the postgraduate threshold of £21,000. These are calculated and deducted separately. For someone earning £50,000 with both Plan 2 and Postgraduate loans, the combined monthly deduction could exceed £300.
Having an undergraduate loan plus a postgraduate loan results in two separate repayments from your salary. Budget accordingly, as the combined deductions can significantly impact take-home pay.
Interest Rates Across Different Plans
Interest accumulates on student loans from the day funds are first disbursed, and understanding how interest is calculated helps you appreciate how your balance changes over time. Different plans have fundamentally different interest structures, reflecting policy changes over the decades since student loans were introduced.
Plan 1 and Plan 4 loans have the most borrower-friendly interest rates. The rate is set at the lower of either the Retail Price Index (RPI) inflation measure or the Bank of England base rate plus 1%. For September 2025 to August 2026, this rate is 3.2%, matching RPI because it is lower than the base rate plus 1%. This protective mechanism ensures Plan 1 and Plan 4 borrowers never face interest rates exceeding inflation by more than 1%.
Plan 2 interest is more complex and depends on your income. While studying and until the April after you leave your course, interest is charged at RPI plus 3%. After graduating, the rate varies based on income. Those earning below the threshold pay RPI only, those at the higher income threshold of £52,885 pay RPI plus 3%, and those in between face rates that scale proportionally. Current rates range from 3.2% to 6.2% for Plan 2 borrowers.
Plan 5 offers a simpler structure with interest capped at RPI only, regardless of income. This means Plan 5 borrowers should never pay back more than they borrowed in real terms, assuming inflation remains stable. However, the trade-off is a longer 40-year repayment period and a lower threshold than Plan 2. Postgraduate loans follow the same RPI plus 3% structure as Plan 2, currently charging 6.2%.
When Student Loans Are Written Off
A crucial feature distinguishing UK student loans from conventional debt is automatic write-off after a specified period. Any outstanding balance, including accumulated interest, is cancelled at the end of your repayment term, and you owe nothing further. The write-off period depends entirely on your plan type and, for older loans, when you first borrowed.
Plan 1 loans taken out from September 2006 onwards are written off 25 years after the April you were first due to repay. For older Plan 1 loans taken before September 2006, the write-off occurs when you reach age 65. Plan 2 loans are cancelled 30 years after the April you first became due to repay, meaning someone who graduated in 2020 and entered repayment in April 2021 would see their loan written off in April 2051.
Plan 4 follows similar rules to Plan 1, with loans taken from August 2007 onwards written off after 30 years, while older Scottish loans are cancelled at age 65 or 30 years, whichever comes first. Plan 5 introduces the longest write-off period at 40 years, meaning a 2024 graduate entering repayment in April 2026 would not see their loan cancelled until April 2066. Postgraduate loans are written off 30 years after the April you were due to start repaying.
While write-off sounds like loan forgiveness, it is built into the system's design. The government expects most graduates will not repay in full, and write-off is factored into the overall financing model for higher education.
Should You Overpay Your Student Loan
The question of whether to make voluntary overpayments is one of the most common financial decisions facing UK graduates. Unlike conventional debt where paying extra always saves money, student loan overpayments only benefit you financially if you would otherwise repay your loan in full before write-off. For many borrowers, especially those on Plan 2 and Plan 5, the optimal strategy is to make only the required repayments.
Consider your projected lifetime earnings and how they compare to your loan balance. Higher earners who will clear their loan well before write-off benefit from overpaying because they reduce the total interest paid. However, moderate earners who will never clear their balance effectively treat repayments as a graduate tax, and overpaying simply reduces a debt that would have been written off anyway.
Specific circumstances where overpaying makes sense include having a relatively small loan balance that you could clear within a few years, earning significantly above average and projecting continued high earnings, or being close to full repayment and wanting to clear the debt before write-off. Conversely, overpaying rarely makes sense if you have a large balance relative to your income, earn around or below average, or would prefer to use extra funds for pension contributions, ISAs, or clearing higher-interest debt.
Sarah has £8,000 remaining on her Plan 1 loan and earns £55,000. Her annual repayments exceed £2,500, meaning she would clear her loan within four years. Overpaying £200 per month would save her approximately £150 in interest over the remaining term. However, if Sarah had £45,000 remaining, the same overpayment strategy would save only marginally more because she would likely repay in full regardless.
How Repayments Work Through PAYE
For employed graduates, student loan repayments are deducted automatically through the Pay As You Earn system. Your employer calculates and deducts the correct amount based on your earnings each pay period, and the funds are passed to HM Revenue and Customs before reaching the Student Loans Company. This automatic process means you never need to make manual payments unless you choose to overpay voluntarily.
When you start a new job, you will typically complete a starter checklist that includes questions about student loans. Your employer uses this information alongside any Start Notice from HMRC to begin deductions. If you have multiple jobs, each employer assesses your income separately for student loan purposes. This can lead to over-repayment if your combined income significantly exceeds the threshold but neither individual job does. You can claim refunds for any overpayment at year-end.
The repayment calculation happens per pay period rather than annually, which means monthly-paid employees see a consistent deduction while weekly-paid workers might experience variations. If you receive a bonus or overtime payment, your deduction will be higher that month to reflect the temporarily increased income. These variations even out over the tax year, but they can catch graduates off guard when reviewing payslips.
Self-Assessment and Student Loans
Self-employed individuals and those with significant untaxed income must repay their student loans through the Self-Assessment tax return rather than PAYE. Your Self-Assessment calculation includes student loan repayments alongside income tax and National Insurance contributions. The repayment is due by 31 January following the end of the tax year, though payments on account may be required for larger amounts.
If you have both employed and self-employed income, the calculation becomes more complex. PAYE deductions from your employment are factored in, and any remaining repayment due is collected through Self-Assessment. HMRC reconciles the amounts to ensure you pay the correct total. Self-employed graduates should budget carefully for the January payment, as student loan repayments can add substantially to the tax bill.
Unearned income above £2,000, such as rental income, dividends, or savings interest, is included in your repayment calculation if you complete a Self-Assessment return and your total income exceeds the threshold. Below £2,000, unearned income is ignored entirely. This cliff edge can affect graduates with investment income who might otherwise avoid Self-Assessment.
Living and Working Overseas
Leaving the UK for more than three months triggers different repayment arrangements. You must notify the Student Loans Company before departure, providing details of your destination country and income. The SLC sets repayment thresholds adjusted for local living costs, which may be higher or lower than UK thresholds depending on where you relocate.
Overseas borrowers make monthly repayments directly to the SLC rather than through payroll deductions. If you fail to provide income evidence, the SLC may apply fixed repayment amounts based on typical incomes in your country of residence. These fixed amounts can exceed what you would pay based on actual income, making it crucial to respond to income evidence requests promptly. Legal action remains possible for overseas borrowers who fail to maintain repayments.
The repayment rate remains 9% for undergraduate loans and 6% for postgraduate loans regardless of where you live. However, the adjusted thresholds mean someone in a lower-cost country might start repaying at a lower equivalent salary than their UK counterpart. Currency conversion is required for all payments, with the borrower bearing any conversion fees or exchange rate fluctuations.
Plan 5: The New Repayment System
Plan 5 represents the most significant overhaul of student loan terms since 2012. Introduced for students starting courses in England from August 2023, it combines lower interest rates with a lower threshold and longer repayment period. The first Plan 5 graduates enter repayment from April 2026, making this tax year the debut for the new system.
The key features of Plan 5 include a threshold of £25,000, the lowest among undergraduate plans, meaning repayments begin at relatively modest salaries. However, interest is capped at RPI only, ensuring borrowers should never repay more than they borrowed in real terms. The trade-off is a 40-year write-off period, the longest ever for UK student loans, meaning graduates will not see their loans cancelled until their early sixties.
Analysis suggests Plan 5 results in higher total lifetime repayments for lower and middle earners compared to Plan 2, due to the lower threshold and longer term. High earners may pay less overall because they clear their balance faster and benefit from the lower interest rate. The policy represents a shift towards higher cost recovery from graduates, particularly those with moderate career earnings.
Plan 5 borrowers face 40 years of potential repayments instead of 30. Even modest earners will repay for longer, though lower interest means balances grow more slowly. High earners benefit most from Plan 5 due to clearing debt faster.
Comparing Plan 2 and Plan 5
Understanding the differences between Plan 2 and Plan 5 helps graduates and prospective students appreciate how policy changes affect lifetime costs. Plan 2's higher threshold of £29,385 versus Plan 5's £25,000 means Plan 2 borrowers keep more of their salary before repayments begin. However, Plan 2's variable interest rate up to RPI plus 3% can cause balances to grow significantly faster.
For a graduate earning £35,000, the annual repayment under Plan 2 is approximately £505, while Plan 5 requires approximately £900 annually due to the lower threshold. Over a career, this difference compounds substantially. However, if the Plan 2 graduate's balance grows through high interest while repaying modestly, they may end up with a larger remaining balance at write-off.
The Institute for Fiscal Studies estimates that the average Plan 5 graduate will repay approximately £10,000 more in total than an equivalent Plan 2 graduate, despite having lower interest. This additional cost falls primarily on middle earners who would not repay in full under either system. The highest earners may actually pay less under Plan 5 due to clearing their debt faster with lower interest accumulation.
The Impact of Salary Growth on Repayments
Your repayment trajectory changes dramatically as your salary evolves throughout your career. Early-career graduates often earn close to or below their plan's threshold, meaning minimal or no repayments despite accumulating interest. As salaries increase with experience and seniority, repayments accelerate, potentially outpacing interest and reducing the balance.
Consider a graduate starting at £28,000 on Plan 2 with a £29,385 threshold. In their first years, they make no repayments while interest accumulates at up to 6.2% on their £50,000 balance. By year five, they earn £38,000 and repay approximately £775 annually. By year ten at £52,000, annual repayments reach approximately £2,035. This accelerating pattern is typical and means most total repayments occur in mid-to-late career.
Salary growth also affects Plan 2 interest rates, which scale with income. As earnings increase from threshold towards £52,885, interest rates climb from RPI towards RPI plus 3%. This creates a double effect where higher earners both repay more monthly and face higher interest on remaining balances. The interplay between these factors makes projecting total lifetime repayments complex.
Employer Benefits and Student Loans
Some employers offer student loan repayment assistance as part of their benefits package, particularly in competitive industries like technology, finance, and law. These schemes typically involve the employer making additional payments directly to the Student Loans Company on the employee's behalf, reducing the outstanding balance faster than through standard repayments alone.
While employer contributions can accelerate loan repayment, they come with tax implications. Unlike contributions to registered pension schemes, employer student loan repayments are treated as taxable income. The employee pays income tax and National Insurance on the value of employer contributions, reducing the net benefit. Despite this, employer schemes can still provide meaningful assistance for those who would otherwise repay in full.
When evaluating job offers with student loan benefits, compare the after-tax value of loan contributions against other forms of compensation. For graduates unlikely to repay in full, a higher base salary or pension contribution may provide better value than loan assistance that effectively prepays a debt destined for write-off.
Student Loans and Your Credit Score
A common misconception is that student loans negatively affect credit scores. In reality, UK student loans do not appear on your credit report and have no direct impact on credit scores. Lenders cannot see your student loan balance when assessing credit applications, though this does not mean the debt is entirely invisible to financial institutions.
Mortgage lenders and others conducting affordability assessments consider your net income after all deductions, including student loan repayments. Your monthly loan deduction reduces disposable income and therefore affects borrowing capacity. Someone repaying £300 monthly has £300 less available for mortgage payments compared to someone without student loans, even if the debt itself does not appear on credit reports.
Some lenders specifically ask about student loan status during mortgage applications to factor potential future repayments into affordability calculations. Being transparent about your student loan position is important, even though the debt technically does not affect credit scores directly.
While your student loan does not appear on credit reports, the monthly repayments reduce disposable income and therefore affect how much lenders will offer you for mortgages and other credit products.
Frequently Asked Questions
Conclusion: Making Informed Decisions About Your Student Loan
Understanding how UK student loan repayments work empowers you to make better financial decisions throughout your career. Your repayment amount depends on your plan type, income, and the applicable threshold, with automatic adjustments ensuring you never pay more than you can afford based on earnings. While interest accumulates and balances may grow, the eventual write-off provides certainty that your obligation has a defined end point.
For most graduates, treating student loan repayments as a graduate contribution rather than conventional debt is the healthiest approach. The amount you repay depends primarily on lifetime earnings rather than your original borrowing, and attempting to clear the debt early only makes sense for high earners certain to repay in full. Use this calculator to understand your current and projected repayments, and plan your finances accordingly.
Stay informed about threshold changes, interest rate updates, and policy announcements that may affect your repayments. Check your Student Loans Company account regularly to track your balance and ensure deductions are correct. Whether you are on Plan 1 approaching write-off, Plan 2 navigating frozen thresholds, or Plan 5 beginning your 40-year repayment journey, understanding the system helps you budget effectively and avoid unnecessary worry about this unique form of borrowing.