Question 1

How are UK student loan repayments calculated?

Accepted Answer

Repayments are income-contingent — you pay a percentage of your income above a threshold. For Plan 2 (most graduates from 2012), you repay 9% of income above £27,295 per year. If you earn £35,000, you repay 9% × (£35,000 − £27,295) = £693 per year (about £58/month). If your income drops below the threshold, repayments stop automatically.

Question 2

What is the repayment threshold for each student loan plan?

Accepted Answer

For 2026/27 the annual repayment thresholds are: Plan 1 — £24,990; Plan 2 — £27,295; Plan 4 (Scotland) — £31,395; Plan 5 (new students from August 2023) — £25,000. Postgraduate Loan repayments are 6% of income above £21,000. Thresholds are updated annually and repayments are collected via PAYE or Self Assessment.

Question 3

When is my student loan written off?

Accepted Answer

Write-off dates vary by plan: Plan 1 — 25 years after the April you first became due to repay, or age 65 (whichever is sooner); Plan 2 — 30 years after the April you first became due to repay; Plan 4 — 30 years after first due to repay, or age 65; Plan 5 — 40 years after first due to repay. Only around 25% of Plan 2 borrowers are expected to repay in full before write-off.

Question 4

Should I make voluntary overpayments on my student loan?

Accepted Answer

For most Plan 2 and Plan 5 borrowers, voluntary overpayments are generally not worthwhile because the loan is written off after a set period regardless — meaning money paid above your statutory repayments benefits the government, not you. However, if you are a high earner projected to repay in full within 10–15 years, clearing the debt early can save significant interest charges.

Question 5

What interest rate is charged on UK student loans?

Accepted Answer

Interest rates vary by plan. Plan 2 rates are capped at RPI during study and range from RPI to RPI+3% after graduation depending on income. Plan 5 rates are capped at RPI. Plan 1 rates are the lower of RPI or Bank of England base rate plus 1%. Interest accrues from the first day of your course and continues throughout the repayment period, regardless of whether you are above the repayment threshold.

Student Loan Repayment Calculator

Loan plan

Balance over time

Frequently Asked Questions

How are UK student loan repayments calculated?

What is the repayment threshold for each student loan plan?

When is my student loan written off?

Should I make voluntary overpayments on my student loan?

What interest rate is charged on UK student loans?