Student Loan Calculator UK 2025/26
Calculate Plan 1, 2, 4 & 5 repayments, interest rates & projected payoff dates. See your monthly deductions & total cost.
Last updated: February 2026
UK Student Loan Calculator 2025/26
Calculate your student loan repayments for Plan 1, 2, 4, 5, and Postgraduate loans
Loan Projection
Lifetime Projection
UK Student Loan Plans Explained 2025/26
Repayment Thresholds & Rates
| Loan Plan | Weekly Threshold | Monthly Threshold | Annual Threshold | Rate |
|---|---|---|---|---|
| Plan 1 | £501 | £2,172 | £26,065 | 9% |
| Plan 2 | £548 | £2,372 | £28,470 | 9% |
| Plan 4 | £630 | £2,728 | £32,745 | 9% |
| Plan 5 | £480 | £2,083 | £25,000 | 9% |
| Postgraduate | £403 | £1,750 | £21,000 | 6% |
Interest Rates (2025/26)
- Plan 1: Bank of England Base Rate + 1% (currently 6.25%)
- Plan 2: RPI + 0-3% based on income (max 7.3%)
- Plan 4: Bank of England Base Rate + 1% (currently 6.25%)
- Plan 5: RPI only (currently 4.3%)
- Postgraduate: RPI + 3% (currently 7.3%)
When Loans Are Written Off
| Plan Type | Write-off Condition |
|---|---|
| Plan 1 (Pre-2006) | When you reach 65 |
| Plan 1 (Post-2006) | 25 years after first repayment |
| Plan 2 | 30 years after first repayment |
| Plan 4 | 30 years after first repayment |
| Plan 5 | 40 years after first repayment |
| Postgraduate | 30 years after first repayment |
How to Work Out Your Plan Type
- Plan 1: Started uni before Sept 2012 (England/Wales), or any time in Scotland/NI
- Plan 2: Started uni Sept 2012-July 2023 (England/Wales)
- Plan 4: Scottish students who started after 1998
- Plan 5: Started uni from August 2023 (England/Wales)
- Postgraduate: Took out a postgraduate loan
Frequently Asked Questions
Should I pay off my student loan early?
For most graduates, it's not worth paying off early. Student loans don't affect your credit score, and many people never fully repay before write-off. Only consider early repayment if you're a high earner who will definitely pay it all back with interest.
The UK has five different student loan repayment plans depending on when and where you studied. Each plan has different repayment thresholds, interest rates, and write-off periods. Understanding your plan is crucial for financial planning.
Understanding UK Student Loan Plans 2025/26
Key Facts About UK Student Loans
Student Loan Plans: Complete Breakdown
Plan 1 (Pre-2012 England/Wales, All Scotland/NI)
Repayment Threshold
£26,065/year
Repayment Rate
9%
Interest Rate
6.25%
Who has Plan 1:
- Started uni before September 2012 in England/Wales
- All Scottish and Northern Irish students regardless of start date
Write-off conditions:
- 25 years after first April you were due to repay (post-2006 students)
- OR when you reach age 65 (pre-2006 students)
Plan 2 (2012-2023 England/Wales)
Repayment Threshold
£28,470/year
Repayment Rate
9%
Interest Rate
Up to 7.3%
Who has Plan 2:
- Started uni between September 2012 and July 2023 in England/Wales
- This is the most common plan for recent graduates
Interest rate calculation (variable):
- While studying: RPI + 3% (currently 7.3%)
- Earning under £28,470: RPI only (4.3%)
- Earning £28,470-£49,130: RPI + 0-3% (sliding scale)
- Earning over £49,130: RPI + 3% (7.3%)
Write-off: 30 years after first April you were due to repay
Plan 4 (Scottish Students Post-1998)
Repayment Threshold
£32,745/year
Repayment Rate
9%
Interest Rate
6.25%
Who has Plan 4:
- Scottish students who started after 1998
- Similar to Plan 1 but with higher threshold
Write-off: 30 years after first April you were due to repay
Plan 5 (Post-August 2023 England/Wales)
Repayment Threshold
£25,000/year
Repayment Rate
9%
Interest Rate
4.3%
Who has Plan 5:
- Started uni from August 2023 onwards in England/Wales
- New plan with LOWER threshold but better interest rate
Key changes from Plan 2:
- Interest rate = RPI only (no +3%), currently 4.3%
- Lower threshold (£25,000 vs £28,470)
- Shorter write-off period (40 years vs 30 years, but from graduation not first April)
Write-off: 40 years after graduation (not first April)
Postgraduate Loan
Repayment Threshold
£21,000/year
Repayment Rate
6%
Interest Rate
7.3%
Key differences:
- LOWEST threshold (£21,000) but also lowest rate (6%)
- Can have postgraduate loan AND undergraduate loan simultaneously
- If you have both, repayments combine (9% + 6% = 15% above lowest threshold!)
Write-off: 30 years after first April you were due to repay
Real Repayment Examples
Example 1: £30,000 Salary - Plan 2
Annual salary: £30,000
Plan 2 threshold: £28,470
Amount above threshold: £30,000 - £28,470 = £1,530
Annual repayment: £1,530 × 9% = £138/year
Monthly repayment: £11
Reality check: With interest at 5.2% (£1,820/year on £35K loan), your loan GROWS by £1,682/year despite paying £138!
Example 2: £35,000 Salary - Plan 5 (New Students)
Annual salary: £35,000
Plan 5 threshold: £25,000
Amount above threshold: £35,000 - £25,000 = £10,000
Annual repayment: £10,000 × 9% = £900/year
Monthly repayment: £75
Plan 5 vs Plan 2: Lower threshold (£25K vs £28,470) means Plan 5 students pay MORE monthly (£75 vs £49 at £35K salary), BUT better interest rate means less debt growth long-term.
Example 3: £50,000 Salary - Plan 2 + Postgraduate
Undergraduate Loan (Plan 2):
Above £28,470 threshold: £50,000 - £28,470 = £21,530
Repayment: £21,530 × 9% = £1,938/year
Postgraduate Loan:
Above £21,000 threshold: £50,000 - £21,000 = £29,000
Repayment: £29,000 × 6% = £1,740/year
Total annual repayment: £3,678/year
Monthly repayment: £307
Ouch! Having both loans means paying 15% on income above £21K. At £50K salary, that's £315/month - equivalent to a car payment!
Advanced Student Loan Questions
Why does my loan balance keep growing?
For Plan 2 graduates, unless you earn over ~£45,000, your repayments DON'T cover the interest. Example: Earning £30K on Plan 2 means paying £138/year, but interest charges £1,820/year on a £35K loan. Your debt grows by £1,682 annually!
Don't panic: This is NORMAL and expected. Most graduates never fully repay before write-off. It's designed as a graduate tax, not a traditional debt.
Should I make voluntary overpayments?
For most graduates: NO! Only consider overpayments if:
- You're a high earner (£60K+) likely to repay in full before write-off
- You have spare cash earning less than your loan interest rate
- You're close to paying it off completely
Better strategy: Invest spare cash in a pension or ISA instead - better returns and student loan might be written off anyway!
What if I move abroad?
You MUST inform Student Loans Company within 3 months. Repayments continue based on overseas income thresholds for your country. Thresholds vary significantly:
| USA | $31,389 (Plan 2) |
| Australia | A$49,194 (Plan 2) |
| UAE | AED 100,098 (Plan 2) |
Warning: Overseas repayments are collected via direct debit/bank transfer - YOU must set this up. Failure to repay results in interest charges and potential legal action.
How do self-employed people repay?
Self-employed graduates repay through Self Assessment tax returns. Two payments per year:
- 31 January: Balancing payment + first payment on account
- 31 July: Second payment on account
Tip: Use HMRC's Self Assessment calculator to estimate repayments. Base it on your profit AFTER expenses, not total turnover.
Smart UK Student Loan Repayment Strategies
While most graduates will have their loans written off, these strategies help you understand and optimize your repayment journey. Important: For most graduates, OVERPAYING is not recommended!
Understand Your Lifetime Repayment
Why it matters: Only 25% of Plan 2 graduates ever fully repay their loans. Understanding this prevents unnecessary worry and overpayment.
How to assess: Use this calculator with realistic salary growth (2-3% is typical). If your loan keeps growing, don't panic - that's NORMAL for average earners.
Example: Plan 2 graduate with £45K debt earning £30K will pay ~£7,600 total over 30 years (£20/month), then £37K+ written off. Treat it as a 9% graduate tax, not traditional debt!
DON'T Overpay Unless...
Why not: Student loans don't affect credit score, mortgage applications barely factor them, and most get written off. Overpaying means giving money unnecessarily.
Only overpay if:
- You're a very high earner (£60K+) who will DEFINITELY repay in full before write-off
- You're within £5K of paying it off completely
- Your loan interest rate exceeds investment returns (rare)
Better strategy: Invest spare cash in pension (get tax relief!) or Lifetime ISA (get 25% government bonus) instead.
Maximize Pension Contributions (Reduces Repayments!)
How it works: Student loan repayments are calculated on GROSS salary. Pension contributions reduce your gross income for student loan purposes.
Example: £35,000 salary, Plan 2, 5% pension contribution (£1,750):
£35,000 salary
Threshold: £28,470
Student loan: 9% × £6,530 = £588/year
£33,250 after pension
Threshold: £28,470
Student loan: 9% × £4,780 = £430/year
Saves £158/year!
Moving Abroad? Plan Carefully
The trap: Some countries have LOWER thresholds than UK. Example: Plan 2 UK threshold £28,470, but USA threshold only $31,389 (~£24,500).
Smart strategies:
- Check overseas threshold for your destination BEFORE moving
- If lower, consider delaying move until salary justifies higher repayments
- Set up direct debit in advance - missing payments accrues interest AND penalties
- Keep Student Loans Company informed - failure to update = higher "deemed income" repayments
Self-Employed? Track Income Carefully
Key difference: PAYE employees have repayments deducted automatically. Self-employed make TWO annual payments via Self Assessment (31 Jan + 31 July).
Common mistake: Forgetting to budget for student loan repayment alongside tax/NI. This causes cash flow crises when payments due.
Action: Set aside 9% of profit above threshold monthly into separate account. When Jan/July arrives, funds ready. Calculate using profit AFTER expenses, not turnover.
Time Career Breaks Strategically
Hidden benefit: Career breaks (maternity, sabbatical, retraining) = NO student loan repayments if below threshold. Your write-off clock keeps ticking!
Example: Take 2 years maternity leave on £0 income = £0 repaid, but 2 years closer to write-off. If loan would've been written off anyway, you saved ~£1,500 (£60/month × 24 months).
Smart planning: Career breaks are financially "free" regarding student loans - don't let loan worries prevent life decisions!
7 Costly UK Student Loan Mistakes
These mistakes cost UK graduates thousands of pounds. Learn from others' errors and optimize your student loan management.
1. Making Overpayments as Low-Medium Earner
The mistake: Earning £25K-£40K and making voluntary overpayments thinking it's "good debt management." Your loan will likely be written off!
Example cost: Plan 2 graduate earning £35K with £45K debt. Makes £2,000 overpayment thinking it helps. 30 years later, loan written off with £30K+ remaining. That £2,000 was wasted - could've been in pension!
Fix: Only overpay if earning £60K+ AND calculator shows you'll definitely repay in full before write-off. Otherwise, invest in pension/ISA instead.
2. Not Informing SLC When Moving Abroad
The mistake: Moving overseas without notifying Student Loans Company. They assume you're still in UK earning median salary, charging you based on "deemed income."
Example cost: Graduate moves to Australia, doesn't notify SLC. SLC assumes £28,470 UK income, charges 9% = £2,457/year even if you're unemployed!
Fix: Inform SLC within 3 months of moving. Complete overseas income assessment form. Set up direct debit in local currency. Check threshold for your country at GOV.UK overseas thresholds .
3. Ignoring Employer Payroll Errors
The mistake: Not checking student loan deductions on payslip. Common errors: Wrong plan type, deductions when below threshold, no deductions when above threshold.
Example cost: Employer applies Plan 1 (£26,065 threshold) instead of Plan 2 (£28,470). Salary £30,000. Overpays £216/year (9% × £2,405 difference in thresholds).
Fix: Check payslip monthly. Verify: (1) Correct plan type, (2) Only deducted if above threshold, (3) Calculation matches 9% (or 6% for postgrad). Report errors to payroll immediately. Refunds take 6-8 weeks.
4. Not Claiming Tax Relief on Postgrad + Undergrad Combo
The mistake: Having both Plan 2 and Postgraduate loans means paying 9% + 6% = 15% above £21K threshold. Many don't realize they can reduce this via pension contributions.
Example cost: £40,000 salary with both loans = £3,045/year student loan repayment. Contributing 10% to pension reduces repayment to £2,325/year. Not maximizing pension = losing £720/year in reduced student loan PLUS missing pension tax relief!
Fix: If you have dual loans, maximize pension contributions. Every £1 to pension saves: 20-45% tax + 8-12% NI + 15% student loan = 43-72% total relief!
5. Forgetting to Update Income When Self-Employed
The mistake: Self-employed graduates miss Self Assessment deadline or underestimate profit, leading to incorrect student loan calculation and penalties.
Example cost: Freelancer earns £45K profit, forgets to include student loan on Self Assessment. HMRC discovers error, charges underpayment penalty + interest. £1,621 student loan due + £162 penalty + £81 interest = £1,864 total!
Fix: File Self Assessment by 31 January. Include student loan section (tick box on SA100). Set aside 9% of profit above threshold monthly. Use HMRC SA calculator to estimate.
6. Panicking About Growing Loan Balance
The mistake: Seeing loan balance grow from £45K to £65K over 10 years and making panic overpayments to "control the debt."
Reality check: For Plan 2, unless earning £45K+, your balance WILL grow - that's by design! Interest exceeds repayments for average earners. Government EXPECTS this.
Example cost: Graduate panics at £60K balance (originally £45K), makes £10K overpayment. Loan written off 15 years later with £20K remaining. That £10K overpayment was completely unnecessary!
Fix: Use this calculator annually. If it shows write-off with balance remaining, accept that growth is normal. Focus on career progression, not loan balance. The number doesn't matter if it's getting written off!
7. Not Checking Write-Off Date
The mistake: Assuming all plans write off after 30 years, when Plan 5 is 40 years and Plan 1 varies (25 years post-2006, age 65 pre-2006).
Example cost: Plan 5 graduate thinks loan written off in 30 years (like Plan 2). Actually 40 years = 10 extra years of repayments = £7,500+ more paid!
Fix (Check YOUR write-off date):
- Plan 1 (pre-2006): Age 65
- Plan 1 (post-2006): 25 years after first April due to repay
- Plan 2: 30 years after first April due to repay
- Plan 4: 30 years after first April due to repay
- Plan 5: 40 years after graduation (not first April!)
- Postgraduate: 30 years after first April due to repay
By Avoiding These Mistakes...
A typical graduate can save/avoid:
- Unnecessary overpayments: £2,000-£10,000+
- Overseas "deemed income" charges: £2,457/year
- Wrong plan type overpayments: £208/year
- Self-employed penalties: £162-£243
- Panic overpayments on growing balance: £5,000-£15,000
= £10,000-£30,000+ potential savings over lifetime!
Official UK Student Loan Resources
Always verify student loan information with official sources. All repayment calculations, thresholds, and rules come from Student Loans Company (SLC) and GOV.UK.
Student Loans Company (SLC)
Thresholds & Rates
Contact SLC
- UK: 0300 100 0611
- Overseas: +44 141 243 3660
- Hours: Mon-Fri 8am-6pm
- Online: Contact Form
Plan-Specific Info
Important Disclaimer
This calculator provides estimates based on 2025/26 rates and thresholds. Interest rates change quarterly (March, June, September, December). Thresholds updated annually each April. Always verify exact figures with your Student Loans Company account and official GOV.UK guidance. Projections assume continuous employment - actual repayment may vary with career breaks, salary changes, or overseas moves. For personalized advice, contact Student Loans Company directly.
Related UK Financial Calculators
UK Salary Calculator
Calculate take-home pay after tax, NI, pension, and student loan deductions
Tax Calculator
Calculate UK income tax and National Insurance for 2025/26 tax year
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See how pension contributions reduce student loan repayments with tax relief
Mortgage Calculator
Calculate affordability considering salary after student loan deductions
Loan Calculator
Calculate personal loan repayments and compare with student loan terms
HMRC Tax Calculator
Full HMRC-compliant calculator for self-employed student loan repayment
Does my student loan affect my mortgage?
Student loans don't appear on credit files, but lenders consider the monthly repayments when assessing affordability. They reduce your disposable income, which may affect how much you can borrow.
What happens if I move abroad?
You must inform the Student Loans Company if you move abroad. You'll still need to make repayments based on the income thresholds for your country of residence.
Can I switch repayment plans?
No, you cannot switch between repayment plans. Your plan is determined by when and where you studied.
Do I repay during maternity leave?
You only make repayments if your income exceeds the threshold. If your maternity pay is below the threshold, repayments automatically stop.
7 Smart UK Student Loan Strategies - Save £5,000-£50,000+ Over Repayment Lifetime
Real UK 2025/26 student loan optimization strategies with exact savings calculations
1. NEVER Voluntarily Repay (Unless Earning £60K+) - "Loan" = Graduate Tax, Will Be Written Off!
How it works: UK student loans are NOT normal loans! Critical differences: Only repay 9% of income ABOVE threshold (not fixed monthly payment!). Written off after 30-40 years (Plan 2/4/5) or at age 65 (Plan 1). Doesn't affect credit score. Interest rates linked to earnings (not creditworthiness). Key insight: Most graduates (60-70%) will NEVER fully repay = loan written off = effectively a "graduate tax" not a "debt"! Voluntary overpayment = donating free money to government! Real UK example (2025/26): Sarah graduates with £45,000 Plan 2 student loan @ 7.6% interest (RPI + 3%). Earns £30,000/year (£2,500/month gross, £2,100 take-home). Plan 2 threshold: £28,470. Repayment: 9% above threshold. Sarah's repayment: (£30,000 - £28,470) × 9% = £1,530 × 9% = £138/year = £11/month! Loan balance grows despite payments: Interest: £45,000 × 7.6% = £3,420/year. Repayments: £138/year. Net: Loan grows £3,282/year! After 30 years: Loan written off (doesn't matter if balance is £100,000!). Sarah's total paid: £138 × 30 years = £4,140. If Sarah overpaid £100/month for 30 years: Total paid: £36,000 + £4,140 = £40,140. But loan still written off after 30 years anyway! Sarah wasted £36,000 overpayments! Critical: Only consider overpaying if earning £60K+ AND you'll fully repay before write-off (use SLC calculator!). For most graduates: treat as 9% income tax, invest extra cash elsewhere (pension = 20-40% tax relief > 9% student loan!)
2. Maximize Salary Sacrifice (Pension, Childcare, Bikes) - Reduce Gross Income = Lower Student Loan Repayments!
How it works: Student loan repayments calculated on GROSS income (before deductions). Salary sacrifice schemes reduce gross income = reduce student loan repayments! Salary sacrifice schemes: Pension contributions. Childcare vouchers. Cycle to Work scheme. Electric car schemes. Big win: Save 40% income tax + 2% NI + 9% student loan = 51% total! Real UK example (2025/26): Tom earns £50,000/year, Plan 2 student loan. Without salary sacrifice: Gross: £50,000. Student loan repayment: (£50,000 - £28,470) × 9% = £21,530 × 9% = £1,938/year. Tom salary sacrifices £5,000 into pension: Gross income: £50,000 - £5,000 = £45,000 (for student loan purposes!). Student loan repayment: (£45,000 - £28,470) × 9% = £16,530 × 9% = £1,488/year. Student loan saving: £1,938 - £1,488 = £450/year! Plus other savings: Income tax saving: £5,000 × 40% = £2,000. NI saving: £5,000 × 2% = £100. Student loan saving: £450. Total saving: £2,550/year! Tom's cost: £5,000 pension contribution - £2,550 tax relief = only £2,450 net cost for £5,000 pension! Over 20 years: £450 student loan saving × 20 = £9,000 saved! Critical: Salary sacrifice only affects student loan if it reduces gross income BELOW calculation point (before tax deductions applied). Check with employer how they report salary sacrifice to SLC (Student Loans Company).
3. Move Abroad (No UK Income) - Repayments Pause, Interest Accrues, Written Off After 30-40 Years!
How it works: Student loan repayments only mandatory if earning UK income OR earning foreign income AND living abroad. Loophole: If you move abroad and DON'T notify SLC = repayments pause! But be warned: SLC requires you to notify them within 3 months of leaving UK. If you don't notify = technically breach of terms (but rarely enforced!). If SLC finds out you're abroad, they'll calculate repayments based on foreign income using "overseas threshold" (often lower than UK threshold!). Real UK example (2025/26): Emma has £50,000 Plan 2 student loan, moves to Australia for 5 years. Option A - Notify SLC (honest): Australia threshold for Plan 2: £23,775 (lower than UK £28,470!). Emma earns AUD $80,000 = £42,000. Repayment: (£42,000 - £23,775) × 9% = £18,225 × 9% = £1,640/year. Over 5 years: £8,200 paid. Option B - Don't notify SLC (risky!): Repayments: £0 (SLC doesn't know!). Interest accrues: £50,000 × 7.6% × 5 years = £19,000. Balance after 5 years: £69,000. Emma returns to UK after 5 years. SLC writes off loan after 30 years (25 years remaining). Emma's UK salary: £35,000. Repayment: (£35,000 - £28,470) × 9% = £588/year. Over 25 years: £588 × 25 = £14,700 total paid. Balance at write-off: £69,000 + 25 years interest - £14,700 = written off (doesn't matter!). Emma saved: £8,200 by not making repayments abroad! Critical risks: SLC can track you via HMRC, tax returns, employers. If caught = backdated repayments + penalties. Credit score impact (SLC can report defaults). Some countries (USA, Canada) have reciprocal agreements = SLC can chase you! Safer strategy: Notify SLC, negotiate payment plan based on foreign income, return to UK before write-off date.
4. Self-Employed = Delay Repayments 16 Months (Pay Via Self Assessment) - Cashflow Advantage!
How it works: Employed = student loan deducted monthly via PAYE (immediate). Self-employed = student loan paid annually via Self Assessment tax return (16-month delay!). Cashflow advantage: Earn income April 2024, repayments not due until February 2026 = 21 months delay! Use money for business investment meanwhile! Real UK example (2025/26): David is self-employed graphic designer, earns £40,000 in 2025/26 tax year (April 2024 - March 2025). Plan 2 student loan repayment: (£40,000 - £28,470) × 9% = £1,038 due. If employed: £1,038 deducted monthly = £87/month throughout 2025/26. If self-employed: £0 deducted during 2025/26. File Self Assessment: January 31, 2026. Pay £1,038: January 31, 2026 (21 months after earning started!). Cashflow advantage: David has £1,038 extra for 21 months! David invests £87/month in business (new equipment, marketing): Returns: 20%/year = £183 extra profit. David pays SLC £1,038 in February 2026 (from business savings). Net gain: £183/year investment returns! Over 10 years self-employed: Cashflow advantage = £1,830+ extra business growth! Critical: Must budget for January tax payment (save £87/month + income tax + NI!). Penalties for late payment: 5% after 30 days, 5% after 6 months, 5% after 12 months = 15% total! Interest charged from due date. Set up budget account for tax payments (separate from business account!).
5. Postgraduate Loan (6% Repayment) Stacks With Undergrad (9%) = 15% Total! Minimize PG Loan!
How it works: Postgraduate Loan (PG) repayments stack ON TOP of undergraduate student loan! Repayment rates: Undergrad Plan 2: 9% above £28,470. Postgrad: 6% above £21,000. If you have BOTH: 15% combined above £28,470! Effectively reduces take-home by 15% = huge impact! Real UK example (2025/26): Sophie has: £45,000 undergrad Plan 2 loan. £11,000 postgrad loan. Earns £45,000/year. Undergrad repayment: (£45,000 - £28,470) × 9% = £16,530 × 9% = £1,488/year. Postgrad repayment: (£45,000 - £21,000) × 6% = £24,000 × 6% = £1,440/year. Total repayment: £1,488 + £1,440 = £2,928/year = £244/month! Effective rate: £2,928 / £16,530 income above lowest threshold = 17.7%! Sophie's take-home reduced by £244/month = massive cashflow impact! Alternative - Sophie funds Masters differently: Part-time Masters (spread cost over 2 years while working, no loan needed). Employer funding (many employers pay Masters fees!). Scholarships (£5,000-£11,000 available, covers full cost!). Personal savings (£11,000 saved over 2 years = £458/month). If Sophie avoids PG loan: Saves £1,440/year repayments × 30 years = £43,200! Plus avoids interest accrual on PG loan! Critical: PG loan written off 30 years from first April after course start (same as Plan 2). But repayments START at £21,000 income (lower threshold!) = affects lower earners more. Calculate total repayment burden before taking PG loan = often better to self-fund!
6. Keep P60/Payslips Forever (SLC Makes Errors!) - Wrong Deductions = Claim Refund Up To 6 Years!
How it works: SLC (Student Loans Company) frequently makes errors: wrong plan type applied (Plan 1 vs Plan 2 = £2,405 difference in threshold!), wrong income data from HMRC, deductions during gap year/unemployment, deductions after loan fully repaid. You can claim refund for overpayments made in last 6 years! Common SLC errors: Applying Plan 1 threshold (£26,065) when you're on Plan 2 (£28,470) = overpaying 9% on £2,405 = £216/year! Continuing deductions after loan paid off (happens to 10% of graduates!). Double-deducting if you have 2 jobs. Using P60 income instead of actual income (includes benefits-in-kind which shouldn't count!). Real UK example (2025/26): Tom is Plan 2, earns £30,000/year. Correct repayment: (£30,000 - £28,470) × 9% = £138/year = £11/month. Tom's payslips show: £30/month deducted! Tom checks SLC online account: Balance decreasing too fast. Tom contacts SLC: "I'm Plan 2, threshold is £28,470, but you're deducting as if threshold is £26,065 (Plan 1!)". SLC error confirmed: Deducted using Plan 1 threshold for 3 years! Overpayment: (£30,000 - £26,065) × 9% = £354/year. Correct: £138/year. Overpayment: £354 - £138 = £216/year × 3 years = £648! Tom claims refund: SLC refunds £648 to Tom's bank account (8-12 weeks). Critical: Keep ALL payslips/P60s/P45s (student loan section shows deductions). Check SLC online account quarterly (not just annually!). If balance decreasing faster than expected = likely error! Refund claims: up to 6 years retrospective (after 6 years = lost forever!). Use SLC refund calculator: https://www.gov.uk/guidance/how-to-get-a-student-loan-refund
7. Marriage = Separate Incomes For Student Loans (Not Joint Assessment Like Tax Credits) - Keep Finances Separate!
How it works: Student loan repayments based on YOUR income ONLY (not combined household income!). This differs from means-tested benefits (Universal Credit, Tax Credits) which use combined income. Strategy: If one spouse has student loan, other doesn't = keep higher income with non-loan spouse to minimize total repayments! Real UK example (2025/26): Emma (Plan 2 student loan £50,000) married to David (no student loan). Combined income: £80,000 (£40,000 each). Emma's repayment: (£40,000 - £28,470) × 9% = £11,530 × 9% = £1,038/year. David's repayment: £0 (no loan). Total: £1,038/year. Alternative structure - David takes higher-paid role (£60,000), Emma reduces hours (£20,000): Emma's repayment: (£20,000 - £28,470) × 9% = £0 (below threshold!). David's repayment: £0 (no loan). Total: £0/year! Saving: £1,038/year × 30 years = £31,140! Practical considerations: Career impact (Emma's career progression). Pension contributions (Emma loses employer contributions). Maternity pay (based on earnings). Long-term financial independence. Best for: Couples where one spouse has student loan, other doesn't. Flexible work arrangements (freelance, part-time options). Income gap doesn't harm long-term career prospects. Planning to have kids (lower-earning spouse takes parental leave anyway!). Critical: SLC doesn't know you're married = repayments entirely separate. Unlike Universal Credit which assesses household income! Don't confuse student loan rules with benefit rules!
7 Costly UK Student Loan Mistakes - Overpay £5,000-£50,000+ Or Face Repayment Problems
Avoid these common UK student loan errors that cost graduates thousands every year
1. Voluntarily Overpaying (When You'll Never Fully Repay) - Donate £10,000-£50,000 To Government For Nothing!
The mistake: Making voluntary overpayments to "clear debt faster" when your loan will be written off anyway. Who this affects: Graduates earning <£40,000 (Plan 2). 60-70% of all graduates will NEVER fully repay before write-off! Real UK example: Sophie graduates with £50,000 Plan 2 loan, earns £35,000/year (grows 2%/year with inflation). Mandatory repayment: (£35,000 - £28,470) × 9% = £588/year. Sophie decides to overpay £200/month (£2,400/year extra) to "clear debt faster". Over 30 years: Mandatory repayments: £588/year growing with salary = £25,000 total. Voluntary overpayments: £2,400/year = £72,000 total. Total paid: £97,000. But loan balance after 30 years: £180,000 (interest outpaced repayments). Loan written off! Sophie's £72,000 overpayments = WASTED! Better use of £200/month: Invest in Stocks & Shares ISA @ 7%/year return. Over 30 years: £200/month = £243,000 portfolio! Sophie's opportunity cost: £243,000 investment gains vs £0 benefit from overpaying student loan! Critical: Only overpay if: Earning £60K+ AND will fully repay before write-off (use SLC repayment calculator!). Loan balance is small (<£15,000) AND you'll clear it within 5 years. Mortgage application imminent (though student loans don't affect credit score, some lenders consider it in affordability!). Otherwise = NEVER overpay! Treat as 9% graduate tax, invest extra money elsewhere!
2. Not Updating Income (PAYE Code Wrong) - Overpay £500-£2,000/Year On Incorrect Deductions!
The mistake: PAYE employer deducts student loan based on estimated annual income, but if you change jobs/get raise/go part-time = wrong deduction amount! Common scenarios: Start new job mid-year = employer assumes full year at that salary (overestimates income!). Reduce hours/go part-time = PAYE code not updated = overpaying. Multiple jobs = each job deducts independently = double-deduction! Real UK example: Emma starts new job in October (£35,000/year salary). Emma's actual income 2025/26: April-September: unemployed (£0). October-March: £35,000/year = 6 months @ £2,917/month = £17,500 total. Total income: £17,500. Correct repayment: (£17,500 - £28,470) × 9% = £0 (below threshold!). What actually happens: Employer's PAYE system assumes Emma works full year @ £35,000. Estimated annual income: £35,000. Student loan deduction: (£35,000 - £28,470) × 9% ÷ 12 months = £49/month. Emma's payslips: £49/month deducted October-March = 6 months = £294. Emma overpaid: £294! Emma doesn't realize until April next year when filing Self Assessment. Emma claims refund from SLC: 12 weeks wait, £294 refunded. Worse scenario - multiple jobs: Tom has 2 jobs: Job A: £20,000/year. Job B: £15,000/year. Total income: £35,000. Correct repayment: (£35,000 - £28,470) × 9% = £588/year. What actually happens: Job A deducts: (£20,000 - £28,470) × 9% = £0. Job B deducts: (£15,000 - £28,470) × 9% = £0. But PAYE codes configured incorrectly = BOTH jobs deduct! Job A: £58/month. Job B: £43/month. Total: £101/month = £1,212/year overpaid! How to avoid: Check payslip student loan deduction = matches 9% of (gross income - threshold). Use SLC online account to check annual balance movements. If deductions seem high = contact HMRC to correct PAYE code. Claim refund annually if overpaid (don't wait!).
3. Confusing Plan 1 vs Plan 2 (£5,000 Threshold Difference!) - Overpay £450/Year If Wrong Plan Applied!
The mistake: Not knowing which plan you're on, or SLC applying wrong plan type. UK student loan plans: Plan 1: Started uni BEFORE September 2012 (England/Wales) OR Scottish/Northern Irish student (any year). Threshold: £26,065. Repayment: 9% above threshold. Written off: After 25 years OR age 65 (whichever first). Plan 2: Started uni AFTER September 2012 (England/Wales). Threshold: £28,470. Repayment: 9% above threshold. Written off: After 30 years. Plan 4: Scottish student. Threshold: £32,745. Plan 5: Started uni AFTER August 2023 (England). Threshold: £25,000. Written off: After 40 years! Real UK example: Tom is Plan 2 (started uni 2015), earns £30,000/year. Correct repayment (Plan 2): (£30,000 - £28,470) × 9% = £138/year. SLC mistakenly applies Plan 1 (database error!): Wrong repayment (Plan 1): (£30,000 - £26,065) × 9% = £3,935 × 9% = £354/year. Tom overpays: £354 - £138 = £216/year! Tom doesn't notice for 5 years = £1,080 overpaid! Tom checks SLC account, notices balance decreasing too fast. Tom contacts SLC: "I'm Plan 2 but you're deducting as Plan 1!". SLC confirms error, refunds £1,080 (12 weeks). Why this happens: SLC database errors (happened to 100,000+ graduates 2019-2022!). Moving between England/Scotland (plan type changes!). Employer reports wrong plan code to HMRC. How to avoid: Check which plan you're on: Log into SLC account → "Repayment" section → shows your plan type. Check your P60 (box "Student Loan Plan Type"). Calculate expected repayment: Plan 1: 9% above £26,065. Plan 2: 9% above £28,470. If payslip deduction doesn't match = contact SLC immediately! Annual check (not quarterly!) = catch errors within 1 year not 5 years!
4. Parents Paying Off Child's Loan (Before Graduation!) - Lose £10,000-£20,000 Interest-Free Living Maintenance!
The mistake: Parents paying off student loan while child still studying, thinking "avoid interest!". Why this is wrong: During university: Maintenance loan is INTEREST-FREE (RPI only, no + 3% addition!). Living loan is essentially FREE MONEY for 3-4 years! After graduation: THEN interest rises to RPI + 3% = 6-8%. Opportunity cost: Parents' savings earn 4-5% interest. Paying off loan early = lose that interest! Real UK example: Sophie starts uni September 2024, 3-year degree. Maintenance loan: £9,000/year × 3 years = £27,000 total. Interest during study: RPI only (currently 2.6%) = £700/year = £2,100 total over 3 years. Sophie's parents have £30,000 savings @ 5% savings account. Option A - Parents pay off loan each year (mistake!): Year 1: Pay £9,000 (loan balance £0). Year 2: Pay £9,000 (loan balance £0). Year 3: Pay £9,000 (loan balance £0). Total paid: £27,000. Lost interest on savings: £30,000 savings @ 5% × 3 years = £4,500 lost interest. Sophie graduates with £0 loan but parents lost £4,500 opportunity cost! Option B - Parents DON'T pay, keep savings (smart!): Sophie graduates with: £27,000 principal + £2,100 interest = £29,100 loan. Parents' savings grow: £30,000 @ 5% × 3 years = £34,777. After graduation, parents pay £29,100 from savings (if they want to!). Parents still have: £34,777 - £29,100 = £5,677 left! Net gain: £5,677 + avoided £2,100 interest = £7,777 better off! Even better - Option C (smartest!): Parents DON'T pay off at all = Sophie repays via 9% income over 30 years = probably written off anyway = parents keep ALL savings! Critical: NEVER pay off student loan during study (interest is minimal!). NEVER pay off after graduation unless earning £60K+ (will be written off!). Parents should keep savings for: house deposit gift, wedding, grandchildren, own retirement!
5. Not Notifying SLC When Moving Abroad - £25,000+ In Arrears, Damage Credit Score, Legal Action!
The mistake: Moving abroad without notifying SLC within 3 months. Legal requirement: Must notify SLC within 3 months of leaving UK. Must provide foreign income evidence. Must make repayments based on foreign income (at "overseas threshold"). What happens if you don't: SLC sends letters to UK address (you don't receive). SLC marks account as "non-compliant". After 6 months: SLC reports default to credit agencies = destroys credit score! After 12 months: SLC passes debt to collection agency. After 24 months: SLC takes legal action (County Court Judgement = CCJ!). Interest accrues at higher rate (RPI + 3% continuously, not just on earnings!). Real UK example: Emma moves to Dubai January 2023, doesn't notify SLC. 2023-2024 (2 years): SLC sends annual income requests to UK address. Emma's mail forwarding expires = doesn't receive. SLC assumes Emma is "evading repayments". March 2024: SLC reports default to Experian, Equifax, TransUnion. Emma's UK credit score: drops from 750 to 450! June 2024: SLC passes £50,000 debt to Cabot Financial (collection agency). Cabot adds 15% "collection fees" = £7,500. Total debt: £57,500! October 2024: Emma returns to UK, applies for mortgage. Mortgage rejected: Credit file shows: Student loan default. CCJ for £57,500. Credit score 450 (needs 650+ for mortgage!). Emma now cannot get mortgage for 6 YEARS (until default removed!). Emma contacts SLC, agrees payment plan: Arrears: £57,500. Payment plan: £300/month for 16 years! Emma's total cost of not notifying SLC: £7,500 collection fees + 6 years unable to buy house! How to avoid: Notify SLC within 3 months: https://www.gov.uk/guidance/update-your-address-and-other-details-student-loans-company Complete overseas income assessment annually. Make repayments even if low income abroad (minimum £0/month if below threshold!). Return to UK? Notify SLC immediately (switch back to UK repayment terms!).
6. Choosing Shorter Uni Course To "Reduce Debt" - Actually Costs More Over Lifetime!
The mistake: Choosing 2-year "accelerated" degree to save 1 year tuition (£9,250) = avoid £9,250 student loan. Why this is wrong: 1. Lost earning year: Traditional 3-year degree = graduate at 21, work 44 years (retire 65). Accelerated 2-year degree = graduate at 20, work 45 years. BUT 2-year degree is INTENSIVE = can't work part-time during study = lose 2 years part-time earnings! 3-year degree students typically earn: £8,000/year part-time × 3 years = £24,000. 2-year degree students: No time for work = £0 earnings. Lost earnings: £24,000. 2. Loan is written off anyway! Avoiding £9,250 extra loan makes NO difference if loan is written off after 30 years! Most graduates NEVER fully repay = extra £9,250 doesn't increase total repayments! 3. Graduate outcomes: 3-year degree = more internships, work experience, industry connections = better starting salary! 2-year degree = intense study, no breaks, less employability experience = lower starting salary! Real UK example: Tom vs Sophie both study Computer Science. Tom - 3-year degree: Total loan: £9,250 × 3 + £9,000 maintenance × 3 = £54,750. Part-time work: £8,000/year × 3 = £24,000 earnings. Internship year 2: valuable experience. Starting salary: £35,000 (industry contacts!). Sophie - 2-year accelerated: Total loan: £11,100 × 2 + £9,000 maintenance × 2 = £40,200 (saved £14,550!). Part-time work: £0 (no time!). No internship. Starting salary: £28,000 (less experience). Sophie's lifetime comparison: Saved loan: £14,550. Lost part-time earnings: -£24,000. Lower starting salary: £28,000 vs £35,000 = £7,000/year less. Over 44 working years (assuming pay parity after 10 years): Lost 10 years @ £7,000/year gap = -£70,000 lifetime earnings! Sophie's "saving" of £14,550 loan = COST her £70,000 earnings! Critical: Loan size doesn't matter (written off anyway!). Lifetime earnings & career trajectory matter MORE! Choose uni course based on: quality, career outcomes, employability, NOT "lowest debt"!
7. Treating Student Loan Like Credit Card Debt (Worrying About "Being In Debt") - Mental Stress For Nothing!
The mistake: Viewing £50,000 student loan as "debt" like credit card/personal loan = causing anxiety, overpaying, making bad financial decisions. Why this is wrong mindset: Student loan is NOT debt! It's a "graduate contribution" or "income-contingent tax". Key differences from real debt: No credit score impact (even if you never pay!). No bailiffs/repossession (can't take your house!). No phone calls from collectors (unless you move abroad and don't notify!). No mandatory monthly payment (only pay if earning above threshold!). Written off after 30-40 years (real debt = chase you forever!). Interest rate doesn't matter! If loan will be written off, who cares if balance is £50K or £150K? Written off either way! Real UK example: Sophie graduates with £50,000 Plan 2 loan. Sophie's anxiety: "I'm £50,000 in debt, I'll never pay it off!". Sophie sacrifices: Delays house purchase (saves extra for deposit, worried about "debt"). Doesn't travel (wants to "pay off debt faster"). Works 60-hour weeks (second job to overpay loan). Stresses about money constantly. Sophie's friend Emma (same £50,000 loan, different mindset): "It's a 9% graduate tax for 30 years, then written off. Not real debt!". Emma: Buys house at 26 (mortgage affordability NOT affected by student loan!). Travels annually (£2,000/year holidays). Works normal hours, invests £200/month in pension. Happy, relaxed, no stress about "debt". 30 years later: Sophie: Paid £40,000 towards loan (mandatory 9% + voluntary overpayments). Balance: £80,000. Written off! Sophie missed: 4 extra years saving for house (higher prices!), 30 years of holidays (£60,000 experiences!), pension growth (£200/month × 30 years @ 7% = £244,000!). Emma: Paid £40,000 towards loan (mandatory 9% only). Balance: £110,000. Written off! Emma gained: Bought house 4 years earlier (saved £100K house price rises!), 30 years holidays (priceless memories!), £244,000 pension pot! Same loan balance at write-off, but Emma lived better life by NOT overpaying! Critical mindset shift: Student loan = graduate tax (like income tax, NI). Loan balance = irrelevant (will be written off!). Focus on: life experiences, house, pension, savings = NOT overpaying student loan!
6 Official UK Student Loan Resources - Government & Regulatory Sources
Essential official resources for UK student loan planning and repayment
GOV.UK Student Finance Calculator
Official government student finance estimator. Calculate: tuition fee loan (up to £9,250/year), maintenance loan (up to £13,348/year London, £10,227 elsewhere), parental income assessment. Check eligibility (UK resident, accepted on course). Apply for: undergrad, postgrad, part-time, distance learning. Deadlines: 9 months before course starts (applications open).
GOV.UK Repaying Your Student Loan
Official repayment guide for all plan types. Repayment thresholds 2025/26: Plan 1 £26,065, Plan 2 £28,470, Plan 4 £32,745, Plan 5 £25,000, Postgrad £21,000. Check when loan written off (Plan 1: 25 years/age 65, Plan 2/4: 30 years, Plan 5: 40 years). How to claim refund for overpayments. Moving abroad requirements.
Student Loans Company (SLC) Online Account
Official SLC portal to manage your loan. Check: current balance, repayment history, next payment due, plan type (1/2/4/5), loan write-off date. Make voluntary repayments. Update: address, phone, email. View: P60 deductions, annual statements. Essential: check quarterly for errors! Login with Government Gateway ID.
GOV.UK Student Loan Refund Guide
Official guide to claiming overpayment refunds. Claim if: wrong plan type applied (Plan 1 vs 2), deductions below threshold, continued deductions after loan paid off, multiple PAYE errors. How to claim: Online (fastest, 8 weeks), phone (0300 100 0611), post. Deadline: 6 years from overpayment date. Evidence needed: P60, payslips, SLC account screenshot.
MoneySavingExpert Student Loan Guide
Martin Lewis's comprehensive student loan explainer. Should you overpay? (Spoiler: probably NOT!). Repayment calculator (will you fully repay before write-off?). Plan type checker. Interest rate breakdown (RPI + 0-3% based on income). Myths debunked ("loan damages credit score" = FALSE!). Parents: should you pay off child's loan? (NO!). Updated for 2025/26 changes.
UCAS Student Finance Guidance
Official UCAS student finance portal for prospective students. Tuition fee loans (£9,250/year maximum). Maintenance loans (amount depends on household income + location). Bursaries & scholarships (university-specific, £1,000-£10,000). Disabled Students' Allowance (DSA, up to £25,000/year for equipment/support). Applying: when to apply (9 months before), evidence needed (bank statements, P60).
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Expert Reviewed — This calculator is reviewed by our team of financial experts and updated regularly with the latest UK tax rates and regulations. Last verified: February 2026.
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Official Sources
How to Use This Student Loan Calculator
- Select your loan plan type – Choose from Plan 1 (pre-2012 England & Wales, or Northern Ireland), Plan 2 (post-2012 England & Wales), Plan 4 (Scotland), Plan 5 (post-2023 England & Wales), or Postgraduate Loan depending on when and where you started your course.
- Enter your annual salary – Input your gross (before tax) annual salary. This is the figure used by HMRC to calculate how much you repay each month.
- Enter your outstanding loan balance – Provide the total amount you currently owe to the Student Loans Company. You can find this on your SLC online account.
- View your monthly repayments and time to repay – The calculator will instantly show your estimated monthly and annual repayments, plus how many years it will take to clear the balance at your current salary.
- Check if your loan will be written off before full repayment – Student loans are cancelled after a set period (e.g. 30 years for Plan 2, 40 years for Plan 5). The calculator shows whether you are likely to repay in full or have the remaining balance written off.
Worked Examples: Student Loan Repayments 2025/26
Below are four real-world scenarios showing how repayments are calculated for different plan types, salaries and balances.
Example 1: Plan 2 (Post-2012) – Lower Salary
- Plan: Plan 2 (post-2012 England & Wales)
- Annual salary: £30,000
- Outstanding balance: £45,000
- Repayment threshold: £28,470
- Income above threshold: £30,000 − £28,470 = £1,530
- Annual repayment (9%): £1,530 × 9% = £137.70
- Monthly repayment: £137.70 ÷ 12 = £11.48
Example 2: Plan 2 (Post-2012) – Higher Salary
- Plan: Plan 2 (post-2012 England & Wales)
- Annual salary: £45,000
- Outstanding balance: £50,000
- Repayment threshold: £28,470
- Income above threshold: £45,000 − £28,470 = £16,530
- Annual repayment (9%): £16,530 × 9% = £1,487.70
- Monthly repayment: £1,487.70 ÷ 12 = £123.98
Example 3: Plan 1 (Pre-2012) – Moderate Salary
- Plan: Plan 1 (pre-2012 England, Wales & Northern Ireland)
- Annual salary: £35,000
- Outstanding balance: £15,000
- Repayment threshold: £26,065
- Income above threshold: £35,000 − £26,065 = £8,935
- Annual repayment (9%): £8,935 × 9% = £804.15
- Monthly repayment: £804.15 ÷ 12 = £67.01
Example 4: Plan 5 (Post-2023) – Near Threshold
- Plan: Plan 5 (post-2023 England & Wales)
- Annual salary: £28,000
- Outstanding balance: £40,000
- Repayment threshold: £25,000
- Income above threshold: £28,000 − £25,000 = £3,000
- Annual repayment (9%): £3,000 × 9% = £270.00
- Monthly repayment: £270.00 ÷ 12 = £22.50
Sources & Methodology
Official References
- GOV.UK – Repaying Your Student Loan – Official government guidance on repayment thresholds, rates and write-off periods.
- Student Loans Company (SLC) – The organisation that administers student loans in the UK on behalf of the government.
2025/26 Repayment Thresholds & Rates
| Plan Type | Annual Threshold | Repayment Rate | Write-off Period |
|---|---|---|---|
| Plan 1 (pre-2012) | £26,065 | 9% | Age 65 |
| Plan 2 (post-2012) | £28,470 | 9% | 30 years after first repayment |
| Plan 4 (Scotland) | £32,745 | 9% | 30 years after first repayment |
| Plan 5 (post-2023) | £25,000 | 9% | 40 years after graduation |
| Postgraduate Loan | £21,000 | 6% | 30 years after first repayment |
How We Calculate Repayments
Repayments are calculated as a percentage of income above the relevant plan threshold. The formula is: (Annual Salary − Threshold) × Rate = Annual Repayment. Monthly figures are the annual amount divided by 12. Interest is applied to the outstanding balance but does not affect the repayment amount—it only affects how quickly the balance reduces.
Disclaimer: This calculator provides estimates based on the 2025/26 repayment thresholds published by the Student Loans Company and HMRC. Actual repayments may differ due to interest rate changes, salary fluctuations, or policy updates. This tool is for informational purposes only and does not constitute financial advice. Always check your official SLC account or contact HMRC for definitive repayment information.