Student Loan Repayment Calculator
How the Calculator Works
This calculator helps you understand your student loan repayment journey based on current UK rules. It calculates:
- Monthly repayments based on your income and loan plan
- Interest charges that vary by plan and income level
- Total interest paid over the life of the loan
- Payoff date based on minimum repayments
- Impact of additional monthly payments
- Comparison of different repayment strategies
Current Rules (2024-2025):
- Plan 1: Repay 9% of income above £24,990/year. Interest: RPI (4.3% for 2024-2025)
- Plan 2: Repay 9% of income above £27,295/year. Interest: RPI to RPI+3% based on income
- Plan 5: Repay 9% of income above £25,000/year. Interest: RPI (4.3% for 2024-2025)
Student Loan Details
Plan 2 (Post-2012)
Repayment threshold: £27,295/year
Expected annual increase in your salary
Make additional payments to pay off your loan faster and save on interest
Repayment Strategies
Minimum Payments
Making only the minimum required payments (9% of income above threshold) is the default approach. This is often the best strategy if you have other high-interest debt or better investment opportunities.
Overpayments
Making additional payments can significantly reduce total interest paid and shorten repayment time. However, consider whether you could earn a better return by investing that money instead, especially for Plan 1 loans with lower interest rates.
When to Overpay
Overpayments make most sense when:
- You have Plan 2 loans with high interest rates (RPI + 3%)
- You're close to paying off the loan
- You have no other high-interest debt
- You've maximized employer pension contributions
- The interest rate exceeds your expected investment returns
Important Considerations
Loan Write-off
Student loans are typically written off after 25-30 years (depending on plan) if not fully repaid. If your income is low or you're unlikely to pay off the loan before write-off, making minimum payments may be the optimal strategy.
Interest Rate Changes
Interest rates are based on RPI and can change annually. Plan 2 interest rates also vary based on your income level. The calculator uses current rates but these may change in the future.
Salary Growth
As your salary grows, your repayments increase automatically (9% of income above threshold). The calculator accounts for expected salary growth to provide more accurate projections.
Disclaimer: This calculator provides estimates only and should not be considered financial advice. The calculations are based on current UK student loan rules (2024-2025) and assume constant interest rates and salary growth. Actual repayments may vary based on changes in government policy, interest rates, or your personal circumstances. Student loans are written off after 25-30 years depending on your plan. Please consult with a qualified financial advisor for personalized advice regarding your student loan repayment strategy.