Student Loan Repayment Calculator UK 2026
Calculate exactly how much you'll repay on your student loan each month with our free UK student loan repayment calculator. Whether you're on Plan 1, Plan 2, Plan 4, Plan 5 or have a Postgraduate loan, our calculator uses the official 2026-27 government thresholds and interest rates to show your monthly repayments, total amount repaid, and when your loan will be written off. Simply enter your annual salary and loan details to see an accurate breakdown of your student loan repayments. Understanding your student loan obligations helps you budget effectively and plan for your financial future. The calculator handles all scenarios including multiple jobs, self-employment, and combined loan types to give you a complete picture of your repayment journey.
How UK Student Loan Repayments Work in 2026
Student loan repayments in the UK are income-contingent, meaning you only repay when you earn above a specific threshold. The amount you repay depends on your income, not how much you borrowed. This system protects lower earners while ensuring those with higher incomes contribute more towards their education costs. Understanding how repayments work helps you plan your finances and avoid surprises when payments start.
The Five-Step Repayment Process
- Step 1 - Graduation: Your repayments don't start immediately. They begin from the April after you finish or leave your course, giving you time to find employment and settle into work.
- Step 2 - Threshold Check: Once you're earning, your income is compared against your loan plan's threshold. For example, if you're on Plan 2 and earn £35,000, you're £6,530 above the £28,470 threshold.
- Step 3 - Calculation: You repay 9% of the amount above the threshold (or 6% for Postgraduate loans). Using the example above, that's 9% of £6,530 = £587.70 per year or £48.98 per month.
- Step 4 - Automatic Deduction: If you're employed, repayments are deducted automatically through PAYE, similar to tax and National Insurance. If you're self-employed, you pay through your Self Assessment tax return.
- Step 5 - Interest Accrual: Interest is added to your balance daily. The rate depends on your plan type and, for Plan 2, your income level. This means your balance can grow even while you're making repayments if your payments don't exceed the interest charged.
Understanding Your Repayment Threshold
The repayment threshold is the annual income level below which you don't make any repayments. Each loan plan has a different threshold, and these are reviewed annually by the government. For 2026-27, the thresholds are set to provide protection for lower earners while ensuring the student loan system remains sustainable.
| Loan Plan | Annual Threshold | Monthly Threshold | Weekly Threshold | Repayment Rate |
|---|---|---|---|---|
| Plan 1 | £26,065 | £2,172 | £501 | 9% |
| Plan 2 | £28,470 | £2,372 | £547 | 9% |
| Plan 4 | £32,745 | £2,728 | £629 | 9% |
| Plan 5 | £25,000 | £2,083 | £480 | 9% |
| Postgraduate | £21,000 | £1,750 | £403 | 6% |
Which Student Loan Plan Am I On?
Your student loan plan depends on when you started your course and where you studied in the UK. The plan type determines your repayment threshold, interest rate, and write-off period. Many graduates are unsure which plan they're on, but it's crucial to know because the differences significantly impact how much you'll repay over your lifetime. You can find your plan type on your student loan statement or by logging into your online student finance account.
Plan 1 Student Loans
Plan 1 applies to students who started their undergraduate course before 1 September 2012 in England or Wales, or at any time if you studied in Northern Ireland. This is the oldest plan type and generally the most favourable. You start repaying when you earn above £26,065 annually, paying 9% on income above this threshold. Interest is capped at RPI or Bank of England base rate + 1%, whichever is lower (currently 3.2% for 2025-26). Crucially, your loan is written off after 25 years or when you reach age 65, whichever comes first, making it possible for older borrowers to have their loans cancelled earlier than other plans.
Plan 2 Student Loans
Plan 2 covers students who started undergraduate courses in England or Wales between 1 September 2012 and 31 July 2023. This plan has a higher threshold of £28,470, meaning you keep more of your income before repayments start. However, the interest rate is variable and can be considerably higher. While studying and for the first few years after graduation, you're charged RPI + 3% (currently up to 6.2%). Once earning, the interest rate slides between RPI (3.2%) at the threshold up to RPI + 3% (6.2%) if you earn £51,245 or more. Your loan is written off 30 years after the April you first became liable to repay, meaning most Plan 2 borrowers won't repay their full loan. Check your take-home pay after student loan deductions to understand your real disposable income.
Plan 4 Student Loans
Plan 4 is exclusively for students who studied in Scotland, regardless of when they started. Scottish students benefit from the highest threshold of £32,745, meaning you can earn more before repayments begin. You repay 9% of income above this level, with interest charged at 3.2% (RPI rate). Like Plan 2, your loan is written off 30 years after the April following graduation. This plan reflects Scotland's different approach to higher education funding, where Scottish students at Scottish universities don't pay tuition fees but may still need maintenance loans.
Plan 5 Student Loans
Plan 5 is the newest undergraduate loan plan, introduced for students starting courses in England from 1 August 2023 onwards. It has the lowest threshold of £25,000, meaning repayments start earlier than Plan 2. However, the interest rate is more favourable at RPI only (currently 3.2%), with no additional percentage added regardless of income. The significant change is the write-off period - extended to 40 years, the longest of any plan. This means higher earners are more likely to repay their full loan amount. Plan 5 represents a shift towards a system where more graduates repay more of what they borrowed.
Postgraduate Loans
Postgraduate loans cover Master's degrees and Doctoral loans. These have the lowest threshold of £21,000 but a lower repayment rate of 6% (instead of 9%). Interest is charged at RPI + 3%, currently up to 6.2%. Postgraduate loans are repaid alongside any undergraduate loans you have, meaning you could be paying both simultaneously. The postgraduate loan is written off 30 years after the April you first became liable to repay. If you have both undergraduate and postgraduate loans, your total monthly repayment will be 6% on income above £21,000 (postgraduate) plus 9% on income above your undergraduate plan's threshold.
Student Loan Interest Rates Explained
Interest is charged on your student loan from the day the first payment is made to you or your university, continuing until the loan is repaid in full or written off. The interest rate varies significantly depending on your loan plan and, for Plan 2, your income. Understanding how interest works is crucial because it determines whether your loan balance grows or shrinks over time. For many graduates, the interest charged exceeds their repayments, causing the balance to increase despite making regular payments.
Current Interest Rates for 2025-26
| Loan Type | Interest Rate | Rate Type | Notes |
|---|---|---|---|
| Plan 1 | 3.2% | Fixed at RPI | Capped at RPI or Bank Rate + 1% |
| Plan 2 (studying) | 6.2% | Fixed | RPI + 3% while at university |
| Plan 2 (earning under £28,470) | 3.2% | Fixed at RPI | Lowest rate when earning below threshold |
| Plan 2 (earning £28,471-£51,244) | 3.2% - 6.2% | Variable | Slides up based on income |
| Plan 2 (earning £51,245+) | 6.2% | Fixed | RPI + 3% for high earners |
| Plan 4 | 3.2% | Fixed at RPI | Same as Plan 1 |
| Plan 5 | 3.2% | Fixed at RPI | No additional interest regardless of income |
| Postgraduate | Up to 6.2% | Fixed | RPI + 3% capped at prevailing market rate |
Real Student Loan Repayment Examples
Understanding student loan repayments is easier with practical examples. These scenarios show how different incomes, loan plans, and circumstances affect your monthly repayments and total amount paid over time. Each example uses the official 2026-27 thresholds and demonstrates the calculations you'll see in your payslip.
Example 1: Plan 2 Graduate Earning £35,000
Sarah graduated in 2023 with a Plan 2 loan. She now earns £35,000 as a marketing executive. The Plan 2 threshold is £28,470, so she's £6,530 above this. Her repayment is 9% of £6,530 = £587.70 per year, or £48.98 per month (£11.30 per week). She has a loan balance of £52,000 with 6.2% interest because she earns above £51,245. Her interest charges (£3,224 per year) far exceed her repayments (£587.70), so her loan balance actually increases by £2,636 this year despite making payments. However, her loan will be written off after 30 years regardless of the balance, so she's unlikely to ever repay the full amount. Understanding your PAYE tax breakdown including student loans helps see exactly where your money goes.
Example 2: Plan 1 Graduate with Two Jobs
Mohammed has a Plan 1 loan and works two jobs. His main job pays £24,000 annually (£2,000 monthly) and his second job pays £8,000 (£666 monthly). The Plan 1 threshold is £26,065 (£2,172 monthly). His main job is below the monthly threshold, so no deductions are made there. His second job is also below the threshold individually. However, at tax year-end, HMRC assesses his combined income of £32,000. He's £5,935 above the annual threshold, so he owes 9% of £5,935 = £534.15 for the year. This is collected through his Self Assessment tax return. If Mohammed had one job paying £32,000 monthly (£2,666), he'd pay £44.46 monthly through PAYE instead.
Example 3: Plan 5 Graduate Just Starting Career
Emma started university in September 2023 under the new Plan 5 system. She graduated in 2026 and landed her first job earning £27,000. The Plan 5 threshold is £25,000, so she's £2,000 above this. Her monthly repayment is 9% of £2,000 ÷ 12 months = £15 per month (£180 per year). Her loan balance is £48,000 with 3.2% interest (£1,536 per year). Even though her repayments (£180) don't cover the interest (£1,536), she shouldn't worry too much. As her salary increases over her career, her repayments will grow. More importantly, any remaining balance is written off after 40 years, so she has decades of repayments ahead.
Example 4: High Earner Likely to Repay in Full
David graduated in 2019 with a Plan 2 loan of £55,000. He now earns £65,000 as a software developer. He's £36,530 above the £28,470 threshold, so he repays 9% of £36,530 = £3,287.70 per year (£273.98 per month). With his high income, he pays the maximum 6.2% interest (£3,410 per year). His repayments nearly match his interest, meaning his balance stays relatively stable. If David continues on this salary trajectory, he'll likely repay his full loan before the 30-year write-off. For David, making voluntary repayments might make financial sense to clear the debt faster and stop the interest accumulating. Use our salary negotiation calculator to understand how pay rises affect your finances.
Example 5: Self-Employed Consultant with Postgraduate Loan
Aisha is self-employed, earning £42,000 per year as a freelance consultant. She has both a Plan 2 undergraduate loan (£35,000) and a Postgraduate loan (£12,000). Her postgraduate repayment is 6% of income above £21,000 = 6% of £21,000 = £1,260 per year. Her undergraduate repayment is 9% of income above £28,470 = 9% of £13,530 = £1,217.70 per year. Her total annual student loan repayment is £2,477.70 (£206.48 monthly), paid through her Self Assessment tax return. Self-employed individuals must budget for this payment as it's not automatically deducted. Check our self-employed tax calculator to see your total tax and loan obligations.
Frequently Asked Questions
How do I know which student loan plan I'm on?
Your student loan plan is determined by when you started your course and where you studied. Plan 1 applies if you started before September 2012 in England/Wales or any time in Northern Ireland. Plan 2 applies if you started between September 2012 and July 2023 in England/Wales. Plan 4 is for Scottish students. Plan 5 is for those starting from August 2023 in England/Wales. Check your student loan statement or log into your online student finance account to confirm your plan type. You can also contact the Student Loans Company on 0300 100 0611 for clarification.
What happens if I don't earn enough to make repayments?
If your income falls below the threshold for your plan type, you won't make any repayments. This protection continues for as long as your income stays below the threshold. When your income increases above the threshold again, repayments automatically restart. Your loan write-off date isn't affected by periods of non-payment due to low income. The loan will still be cancelled after the set period (25, 30 or 40 years depending on your plan), regardless of how much you've repaid. This income-contingent system means you're never forced to repay when you can't afford it.
Can I pay off my student loan early?
Yes, you can make voluntary additional payments to clear your loan early by contacting the Student Loans Company. However, this is rarely financially beneficial for most graduates. Because most people won't repay their full loan before write-off, paying extra means you're giving away money unnecessarily. Early repayment only makes sense if you're a high earner who will definitely repay the full amount before write-off anyway. In that case, paying early saves interest charges. Calculate whether you're likely to repay in full before deciding - our calculator shows your projected total repayment to help with this decision.
How does self-employment affect student loan repayments?
Self-employed individuals repay student loans through their Self Assessment tax return rather than automatic PAYE deductions. HMRC calculates your repayment based on your annual profit above the threshold. You pay the same percentage (9% for Plans 1-5, 6% for Postgraduate) but it's paid annually or in two instalments (January and July) rather than monthly through payroll. If you're both employed and self-employed, HMRC considers your combined income. Any repayments already made through PAYE are deducted from what you owe through Self Assessment. Make sure to budget for these payments as they aren't automatically deducted throughout the year.
What if I have multiple student loans?
If you have undergraduate and postgraduate loans, or studied in different parts of the UK, you might have multiple loan plans. You'll make repayments on all loans you have, calculated separately but deducted as a single amount from your pay. For example, if you have Plan 2 and Postgraduate loans, you'll pay 6% on income above £21,000 (postgraduate threshold) plus 9% on income above £28,470 (Plan 2 threshold). The calculations can be complex, which is why using our calculator is helpful - it handles multiple loan scenarios accurately. Your payslip will show one total student loan deduction, but it's split between your loans according to the government's rules.
Do student loans affect my credit score or mortgage applications?
Student loans don't appear on your credit file and don't directly affect your credit score. They're not considered commercial debt. However, mortgage lenders will ask about student loan repayments when assessing affordability because they reduce your disposable income. For example, if you earn £40,000 and repay £200 monthly in student loans, lenders consider your available income as lower than someone earning £40,000 with no student loan. This might reduce the mortgage amount you can borrow, but it won't prevent you from getting a mortgage. The impact is similar to having any other regular financial commitment. Check our net salary calculator to understand your true disposable income.
What happens to my student loan if I move abroad?
If you move overseas for more than 3 months, you must inform the Student Loans Company and continue making repayments. Each country has its own threshold, usually lower than UK thresholds and based on the country's average income. You'll need to provide proof of income annually. Repayments are calculated on your overseas income converted to pounds. If you don't keep the Student Loans Company informed, you'll be charged a fixed monthly repayment and may face penalties. Importantly, moving abroad doesn't make your loan disappear - it's still written off after the same period (25, 30 or 40 years), but you must continue paying based on overseas thresholds.
Can student loan repayments be refunded if I overpay?
Yes, you can claim a refund if you've overpaid. This commonly happens if your income fluctuates throughout the year, for example due to bonuses, overtime, or periods without work. If your total annual income is below your plan's yearly threshold, but you made repayments because you went over the monthly or weekly threshold temporarily, you can request a refund from HMRC. You should claim at the end of the tax year (April). Contact HMRC on 0300 200 3300 with your National Insurance number and P60. Refunds are paid directly to your bank account. If you're employed, your employer can't refund overpayments - only HMRC can process them.
How accurate are student loan repayment calculators?
Our calculator uses official government thresholds and interest rates for 2026-27, making it highly accurate for current repayments. However, long-term projections involve assumptions about future salary growth, threshold changes, and interest rates, which can change. The government reviews thresholds annually, and interest rates vary with RPI inflation. Our calculator assumes current rates remain constant, which provides a useful estimate but shouldn't be treated as guaranteed. The actual amount you repay over your career may differ. Use the calculator to understand your current obligations and general repayment trajectory, but review annually as rates and thresholds change.
Should I prioritise paying off my student loan or saving/investing?
For most graduates, prioritising other financial goals over paying off your student loan early makes better sense. Student loan repayments are capped at 9% of income above the threshold (6% for postgraduate), meaning they never become unmanageable. Because most borrowers won't repay their full loan before write-off, paying extra means losing that money for no benefit. It's usually better to build an emergency fund, save for a house deposit, contribute to a pension, or invest. Only high earners definitely on track to repay in full before write-off might benefit from early repayment to save on interest. Compare student loan interest rates with other debts - credit cards and personal loans almost always have higher rates and should be cleared first.
Student Loan Write-Off Rules
One of the most important aspects of student loans is that they're eventually written off after a set period, regardless of how much you've repaid. This protection means even if your balance has grown due to interest exceeding repayments, you won't be paying forever. The write-off period varies significantly between loan plans, affecting whether most graduates will repay their full loan or have a balance cancelled. Understanding when your loan will be written off helps you plan long-term finances and decide whether voluntary repayments make sense.
| Loan Plan | Write-Off Period | Write-Off Calculated From | Example |
|---|---|---|---|
| Plan 1 | 25 years or age 65 | First April after leaving course | Finished 2020: written off April 2045 or age 65 |
| Plan 2 | 30 years | First April after leaving course | Finished 2024: written off April 2054 |
| Plan 4 | 30 years | First April after leaving course | Finished 2022: written off April 2052 |
| Plan 5 | 40 years | First April after leaving course | Finished 2026: written off April 2066 |
| Postgraduate | 30 years | First April after leaving course | Finished 2023: written off April 2053 |
Data Sources and Calculation Accuracy
Our Student Loan Repayment Calculator uses official data from UK government sources to ensure accuracy and reliability. All thresholds, interest rates, and repayment percentages are sourced directly from the Student Loans Company and HM Revenue & Customs publications. The calculator is updated annually when new rates are announced, typically in the autumn for the following April's implementation.
Official data sources:
- GOV.UK - Repaying Your Student Loan - Official repayment thresholds and rates
- Student Loans: Terms and Conditions 2025-26 - Interest rates and repayment rules
- Student Loans Interest Rates Announcement - September 2025 interest rate updates
- Student Loans Company annual statements and guidance documents
- HMRC guidance on student loan repayments through PAYE and Self Assessment
Last updated: January 2026. The calculator reflects the 2026-27 tax year thresholds (April 2026 to March 2027) and current interest rates (September 2025 to August 2026).
Disclaimer: This calculator provides estimates based on the information you enter and current government rates. Actual repayments may vary due to changes in your income, threshold adjustments, or interest rate fluctuations. The calculator assumes consistent salary growth and stable interest rates, which may not reflect reality. For definitive information about your specific student loan, log into your online account at GOV.UK or contact the Student Loans Company directly. This tool is for guidance purposes and should not be considered financial advice.
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