How are student loan repayments calculated?

You repay a percentage of your income above a threshold, not a fixed monthly amount. For Plans 1, 2, 4 and 5 the rate is 9% of income above the plan threshold. For Postgraduate Loans it is 6%. Repayments are collected automatically through PAYE (payroll) if you are employed, or through Self Assessment if self-employed.

What are the repayment thresholds for 2026/27?

Plan 1: £24,990/year. Plan 2: £27,295/year. Plan 4 (Scotland): £31,395/year. Plan 5: £25,000/year. Postgraduate Loan: £21,000/year. These thresholds are reviewed each April. For Plan 5 specifically, the threshold is frozen at £25,000 until 2027.

When does my student loan get written off?

Plan 1: written off 25 years after the April you first became liable to repay (or at age 65 if the course started before 2006). Plan 2: 30 years after first repayment due date. Plan 4: 30 years. Plan 5: 40 years. Postgraduate Loan: 30 years. If you die or become permanently disabled, the loan is cancelled. The loan is also wiped in bankruptcy in certain circumstances, though this is unusual.

Can I have two student loans at the same time?

Yes. If you have an undergraduate loan (Plan 1, 2, 4 or 5) and a Postgraduate Loan, repayments are collected separately. Undergraduate repayments are 9% above the undergraduate threshold; postgraduate repayments are 6% above £21,000. Both can be deducted from your salary simultaneously, which can significantly affect take-home pay.

Is it worth repaying my student loan early?

For most borrowers, early repayment does not make financial sense. The interest rate on Plan 2 and Plan 5 loans is linked to RPI, and many people will never fully repay before the loan is written off, meaning they would pay more than necessary by overpaying. If you are on Plan 1 with a low balance you are likely to repay in full, in which case early repayment to save interest may be worthwhile. Always check your loan balance and projected write-off date before deciding.

Plan 1: started an undergraduate or postgraduate course in the UK before September 2012, or you studied in Northern Ireland. Plan 2: started an undergraduate course in England between September 2012 and July 2023. Plan 4: studied in Scotland on or after 1 September 1998. Plan 5: started an undergraduate course in England from August 2023 onwards. Postgraduate: took out a Masters or Doctoral loan. Your payslip should show your plan type, or you can check via the Student Loans Company.

Tax & Income

Student Loan Repayment Calculator

See how much you repay on your UK student loan each month based on your salary. Covers Plan 1, 2, 4, 5, and Postgraduate loans for 2026/27.

Updated April 2026

Your details

Loan plan

Annual gross salary

Also repaying a Postgraduate Loan

6% on income above £21,000, deducted separately

Plan 2

Repayment threshold£27,295/year

Rate above threshold9%

Written off after30 years

Your results

£35.29/month Repayment on Plan 2

Monthly student loan deduction

£35.29

Annual £423 · Weekly £8.14

Breakdown

Annual gross salary: £32,000
Plan 2 threshold: £27,295
Income above threshold: £4,705
Annual repayment (9%): £423
Monthly repayment: £35.29
Weekly repayment: £8.14

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Student Loan Repayment Explained

Frequently asked questions

Student Loan Guide

How student loan repayments work

Student loan repayments in the UK are unlike any other debt. You only repay when you earn above a certain threshold, repayments are collected through the tax system just like income tax, and any remaining balance is written off after a set number of years. Understanding how your plan works is essential to deciding whether early repayments ever make financial sense.

Repayment thresholds by plan type

The threshold — the income level below which you pay nothing — varies by plan. In 2025/26 the thresholds are: Plan 1 (students who started before September 2012) £26,065; Plan 2 (England and Wales, started September 2012 or later) £28,470; Plan 4 (Scotland) £32,745; Plan 5 (new undergraduate students from August 2023 onwards) £25,000; Postgraduate Loan £21,000. If your income falls below the threshold for your plan in any year, no repayment is due and nothing carries over as arrears.

How repayments are calculated

For Plans 1, 2, 4, and 5 you repay 9% of gross income above the threshold. The Postgraduate Loan is repaid at 6%. If you have both an undergraduate and a Postgraduate Loan, both charges apply simultaneously — a combined 15% on income above both thresholds. For employees, repayments are deducted through PAYE automatically by your employer alongside income tax and National Insurance, so you never need to calculate or send a cheque. The Student Loans Company reconciles the annual amount through your tax return if you are self-employed.

When is the loan written off?

Each plan has a write-off date, after which any remaining balance is cancelled and you owe nothing further. Plan 1 loans are written off when you turn 65 or 25 years after the April following graduation, whichever comes first. Plan 2 loans are written off 30 years after the April following graduation. Plan 5 loans extend to 40 years. Postgraduate Loans are written off after 30 years. The write-off is not taxable income — it simply disappears. Research by the Institute for Fiscal Studies suggests the majority of Plan 2 borrowers will have some balance written off.

Does overpaying make financial sense?

For most Plan 2 borrowers, voluntary overpayments are unlikely to be financially beneficial. Because any outstanding balance is written off at the 30-year mark, borrowers who would not fully repay under the standard schedule gain nothing from paying extra — they effectively pre-pay a debt that would have been cancelled. Overpayment makes sense only if you expect to repay the full balance within the write-off period, which typically applies only to very high earners or those with small balances. Plan 1 and Plan 5 borrowers should model their own repayment trajectory before making voluntary payments.

Student loans and self-employment

If you are self-employed, student loan repayments are not deducted by an employer. Instead, HMRC calculates your repayment through Self Assessment based on your taxable profits for the year. You declare your loan plan on your tax return and the repayment is added to your tax bill. This means self-employed borrowers may find a larger-than-expected tax bill in January if they have not set money aside. Keeping a record of your loan plan type and balance is important — the Student Loans Company can provide a balance statement at any time.

Sources & methodology

Built and maintained by Tim, a personal finance enthusiast (not a financial adviser). Last reviewed April 2026. Rates and thresholds come from official UK government publications.

HMRC: Income Tax rates and allowances · Official rates, bands and thresholds
GOV.UK: National Insurance rates · Employee and employer NI rates
Scottish Government: Income Tax · Scottish income tax rates and bands

Figures are estimates only. This is not financial or tax advice. For help with your specific situation, speak to HMRC or a qualified adviser.