Postgraduate Loan Repayment Calculator

Complete Guide to Postgraduate Loan Repayment

What Is a Postgraduate Loan?

The UK government offers two types of postgraduate student loan through Student Finance England. The Masters Loan (maximum £12,471 for 2026-27) is available to students studying for a standalone postgraduate masters degree. The Doctoral Loan (maximum £28,673 for 2026-27) is for PhD or other doctoral-level programmes. Both are income-contingent loans, meaning repayments are always tied to what you earn rather than what you borrowed.

Unlike undergraduate loans, the postgraduate loan is paid directly to you, not to your institution. You manage how the money is split between tuition fees and living costs. The loan is available regardless of your household income — it is not means-tested. However, you must be ordinarily resident in England, under 60 years old, and not have already obtained a qualification at the same level with a student loan.

The £21,000 Repayment Threshold

Postgraduate loan repayments begin in the April after you finish or leave your course, provided your earnings exceed the threshold. In 2026, this threshold is £21,000 per year (£1,750 per month / £404 per week). You repay 6% of everything above this threshold — lower than the 9% rate for undergraduate loans.

For example, if you earn £27,000 per year, you earn £6,000 above the threshold. Your annual PGL repayment is £6,000 × 6% = £360, or £30 per month. The relatively modest PGL rate reflects that loan amounts are smaller than undergraduate balances, and the government expects most borrowers to clear the debt before 30-year write-off.

Combined Repayments: Undergraduate + Postgraduate

If you completed an undergraduate degree and now hold a postgraduate loan as well, you will be making repayments on both simultaneously once you earn enough. The two deductions are calculated independently and deducted separately through PAYE.

How they stack: Suppose you earned £35,000 and have both a Plan 2 undergraduate loan and a Masters Loan:

• Plan 2 repayment: (£35,000 − £27,295) × 9% = £7,705 × 9% = £693/year (£57.75/month)
• PGL repayment: (£35,000 − £21,000) × 6% = £14,000 × 6% = £840/year (£70/month)
• Total monthly deduction: £127.75

There is no combined cap or interaction between the two repayments — both are collected at the same time, simply as separate percentage deductions. Your payslip will show them as distinct line items.

Interest Rate: RPI + 3% Throughout

Unlike undergraduate loans where the interest rate can vary based on income (Plan 2 previously used RPI to RPI+3% depending on salary), postgraduate loans always charge RPI + 3% throughout the entire loan lifecycle — from the first payment date until the loan is fully repaid or written off. This is currently approximately 7.3% (2025/26).

RPI is typically higher than CPI inflation and is reviewed and set each September based on the previous March figure. The rate can change substantially year on year — it was as high as 12% in recent years due to elevated inflation. Check the Student Loans Company website each September for the updated rate.

30-Year Write-off

Postgraduate loans are written off 30 years after the April you first became liable to repay — the same write-off window as Plan 2 undergraduate loans. Given that postgraduate loan amounts are much smaller than typical undergraduate balances, many graduates on average salaries will repay their PGL in full well before the 30-year mark.

For example, a Masters Loan of £12,471 at 7.3% interest for someone earning £30,000 (£9,000 above threshold → £540/year repayment) would typically be cleared within 25–28 years depending on salary growth, assuming moderate income increases. Higher earners will clear it much sooner.

HMRC Collection and Employer Deductions

Postgraduate loan repayments are collected by HMRC via PAYE in the same way as income tax and National Insurance. Once you notify the SLC you have left your course, they inform HMRC, who will update your tax code and begin collecting repayments through your employer. If you are self-employed, repayments are calculated and paid via your Self Assessment tax return.

If you have both an undergraduate and a postgraduate loan, HMRC will collect both from your salary, each shown separately. You should check your payslip in April each year to verify both deductions are being applied correctly.

Working Overseas

Like undergraduate loans, postgraduate loans must be repaid even when you live and work abroad. You must contact the Student Loans Company at least four weeks before leaving the UK for more than three months. Overseas repayments use equivalent thresholds for your country of residence, calculated using purchasing power parity. Rates are reviewed annually. Non-compliance can result in automatic deductions at the default rate.

Should You Overpay Your Postgraduate Loan?

Given that postgraduate loan amounts are smaller and write-off is at 30 years, the case for overpaying is stronger than for undergraduate loans. If your balance is small relative to your income — for instance, a Masters Loan of £12,000 with a growing salary — you may clear the debt naturally within 10–15 years.

However, the 7.3% interest rate is high. If you have surplus cash earning less than 7.3% in savings, paying down the PGL early is mathematically advantageous. But compare this against maximising pension contributions (which attract tax relief), building an emergency fund, and ISA allowances first. There is no penalty for early repayment.

Eligibility Criteria

To qualify for a postgraduate loan from Student Finance England, you must:

• Be a UK national (or have settled/pre-settled status under EU Settlement Scheme)
• Be ordinarily resident in England on the first day of your course
• Be under 60 years old at the start of the academic year
• Not have already studied a postgraduate course at the same level funded by a UK student loan
• Be studying at a UK-recognised provider with a course of at least one academic year
• Have resided in the UK for three years immediately before your course start date

Students from Scotland apply through SAAS, Wales through Student Finance Wales, and Northern Ireland through Student Finance NI — each with different loan amounts and rules.

Worked Examples