Student Loan Repayment Calculator 2025/26
Calculate your student loan repayments based on your salary, loan balance, and plan type. See your monthly repayments, estimated time to repay, and whether your loan is likely to be written off.
How Student Loan Repayments Work
Student loan repayments in the UK are income-contingent, meaning you only repay when you earn above a certain threshold. The repayment amount is calculated as a percentage of your income above that threshold, not on the total amount you earn. Your employer deducts the repayment from your salary through PAYE, alongside income tax and National Insurance.
Unlike a traditional loan, you do not choose how much to repay each month. The amount is automatically calculated based on your earnings. If your income drops below the threshold (for example, if you lose your job or take a career break), repayments stop automatically. There are no penalties for not repaying, and the loan is written off after a set period regardless of the remaining balance.
It is important to understand that student loan repayments do not affect your credit score and are not visible on credit reports. They are treated more like a graduate tax than a traditional debt. However, they do reduce your take-home pay, which mortgage lenders may take into account when assessing affordability.
Repayment Thresholds and Rates 2025/26
| Plan Type | Who | Threshold | Rate | Write-off |
|---|---|---|---|---|
| Plan 1 | Pre-2012 (England/Wales), Scotland, NI | £24,990 | 9% | 25 years |
| Plan 2 | Post-2012 (England/Wales) | £27,295 | 9% | 30 years |
| Plan 4 | Post-2012 (Scotland) | £31,395 | 9% | 30 years |
| Plan 5 | Post-2023 (England) | £25,000 | 9% | 40 years |
| Postgraduate | Postgraduate loan | £21,000 | 6% | 30 years |
Interest Rates on Student Loans
Interest rates on student loans vary by plan type and are linked to the Retail Price Index (RPI). Plan 1 loans are charged interest at the lower of RPI or Bank of England base rate plus 1%. Plan 2 loans are charged RPI while studying, and RPI plus up to 3% after graduation depending on income (the maximum rate applies to earners above £49,130). Plan 4 loans mirror Plan 1 rates. Plan 5 loans are charged at RPI only, with no additional income-based margin.
Interest accrues from the day the loan is paid out, including while you are studying. For Plan 2 borrowers, interest rates can be significantly higher than mortgage rates, which is why some people consider making voluntary repayments. However, for the majority who will not repay in full, the interest rate is largely irrelevant as the remaining balance will be written off.
Worked Examples
Example 1: Plan 2 Graduate on £30,000
A graduate with a Plan 2 loan earning £30,000 per year:
- Repayment threshold: £27,295
- Income above threshold: £30,000 - £27,295 = £2,705
- Annual repayment: £2,705 at 9% = £243.45
- Monthly repayment: £20.29
At £243.45 per year with a £40,000 loan balance and 7.3% interest, the interest alone is approximately £2,920 per year, far exceeding repayments. The loan balance will grow over time and is very likely to be written off after 30 years.
Example 2: High Earner on £60,000
A graduate with a Plan 2 loan earning £60,000 per year:
- Income above threshold: £60,000 - £27,295 = £32,705
- Annual repayment: £32,705 at 9% = £2,943.45
- Monthly repayment: £245.29
Example 3: Multiple Plans (Plan 1 + Postgraduate)
A graduate with both Plan 1 and Postgraduate loans earning £35,000:
- Plan 1: (£35,000 - £24,990) at 9% = £900.90/year
- Postgraduate: (£35,000 - £21,000) at 6% = £840/year
- Total annual repayment: £1,740.90
- Total monthly repayment: £145.08
Will My Student Loan Be Written Off?
Whether your student loan will be written off depends on your lifetime earnings relative to your loan balance and interest rate. The Institute for Fiscal Studies estimates that around 70% of Plan 2 borrowers will not repay their loan in full before it is written off after 30 years. For these borrowers, the loan effectively operates as a graduate tax of 9% on income above the threshold for 30 years.
Key factors that determine whether write-off is likely include your starting salary, expected salary growth, loan balance at graduation, and the prevailing interest rate. Generally, graduates in higher-paying careers (medicine, law, finance, engineering) are more likely to repay in full, while those in public sector or lower-paid roles are more likely to see their loan written off.
Common Mistakes with Student Loan Repayments
1. Overpaying When Write-off is Likely
If your loan is likely to be written off, making voluntary overpayments means you are paying back more than you need to. The money would be better used for savings, pension contributions, or paying off higher-interest debt. Use this calculator to estimate whether full repayment is realistic before committing to overpayments.
2. Not Checking Your Plan Type
Many borrowers are unsure which plan they are on, leading to incorrect estimates of their repayments. Check your Student Loans Company (SLC) account online to confirm your plan type. The difference between thresholds can mean hundreds of pounds per year in repayments.
3. Forgetting to Update After Repayment
If you repay your student loan in full, you need to ensure your employer stops making deductions. HMRC should send a stop notice, but this does not always happen promptly. If you are close to repaying in full, consider switching to direct debit payments to avoid overpaying through PAYE.
4. Ignoring the Impact on Take-Home Pay
Student loan repayments reduce your take-home pay, which can affect mortgage affordability assessments. A Plan 2 borrower earning £40,000 repays £1,143.45 per year (£95.29 per month). When budgeting or applying for a mortgage, make sure to account for these deductions alongside tax and National Insurance.