Student Loan Repayment Calculator UK

How to use this calculator

1. Get your plan rightPlan 1 is pre-2012 England and Wales. Plan 2 covers 2012 to 2023. Plan 5 starts from 2023. Plan 4 is Scotland. The thresholds differ by thousands of pounds, so the wrong plan gives a materially wrong figure.
2. Enter gross salaryRepayments are calculated on gross pay before tax, though after any salary-sacrifice pension. Bonuses and overtime count in the period they are paid.
3. Fill in the projection to answer the real questionThe monthly figure is easy. Whether the loan will ever be repaid is the question that determines whether overpaying is sensible, and that needs a balance, an interest rate and a write-off date.
4. Be honest about salary growthThe projection is highly sensitive to it. Assuming 5% a year compounds into a very different career from 2%, and the answer on overpaying can flip between them.

Why it behaves like a graduate tax

A UK student loan does not behave like any other debt, and the mental model people bring from mortgages and credit cards leads them badly astray.

The repayment is a percentage of income above a threshold. It has nothing to do with the balance. Someone owing £20,000 and someone owing £70,000 on the same salary and plan pay exactly the same each month. Borrowing more does not increase what you pay; it only affects whether the debt is ever cleared.

There is no fixed term in the ordinary sense. Repayments continue while income exceeds the threshold and stop when it does not — during unemployment, a career break, or a period of low earnings. Nothing accrues as arrears, and there is no default.

The balance is written off after the plan period regardless of what remains: 25 years for Plan 1, 30 for Plan 2, and 40 for Plan 5. Nothing is owed after that and it does not appear on a credit file.

That write-off is the crux of the overpayment question. If your projected repayments will never clear the balance, every voluntary overpayment is money you would never otherwise have paid. You are not saving interest — you are simply paying more in total for the same outcome. For a large number of Plan 2 graduates on average salaries, that is precisely the position.

The reverse holds for high earners. Someone who will clear the balance well before write-off is paying real interest on real debt, and overpaying does save money.

The deciding question is therefore not "can I afford to overpay" but "will I ever clear this anyway". The projection above is there to answer it.

Worked example: £35,000 on Plan 2

Income above the Plan 2 threshold: £35,000 − £28,470 = £6,530.

At 9%: £587.70 a year, or £48.97 a month.

That is 1.7% of gross salary — considerably less than most people assume when they hear "9%", because the 9% applies only to the income above the threshold, not to the whole salary.

Now the projection. With a £45,000 balance, 7% interest and 3% annual salary growth over 30 years to write-off, the interest charged each year at the outset is £3,150 against repayments of £588. The balance grows by more than £2,500 in year one.

Salary growth eventually raises repayments, but on these assumptions it does not catch up. The balance keeps rising for many years, and a large sum is written off at year 30 having never been repaid.

What that means practically: a graduate in this position who inherits £10,000 and puts it against the loan has simply given away £10,000. Their monthly repayment does not change — it never depended on the balance — and the amount written off falls by the same £10,000 they paid. The only beneficiary is the Treasury.

For the position to reverse, salary has to rise enough that repayments exceed interest for long enough to clear the balance. On a £45,000 balance at 7%, repayments need to exceed £3,150 a year, which requires a salary above roughly £63,500. Sustained well above that for most of a career, the loan does get cleared, and overpaying then genuinely saves interest.

Plans, thresholds and write-off periods

Plan 5 is the significant change. A lower threshold means repayments start earlier, and a 40-year write-off means far more graduates will repay in full. The combination substantially increases the lifetime cost for middle earners, who under Plan 2 would have had a large balance written off. Anyone on Plan 5 should treat the overpayment question quite differently from a Plan 2 graduate.

Interest, multiple loans and what to check

Interest is charged from the day the first payment is made to your university, not from graduation. For Plan 2 it varies with income during study and afterwards, running from RPI to RPI plus three percentage points depending on earnings. A cap linked to prevailing market rates limits how high it can go.

The interest rate matters far less than people expect, precisely because of the write-off. If the balance is never cleared, the rate affects only the size of the sum eventually written off. It is genuinely irrelevant to what you pay. For someone who will clear the loan, the rate is real and does affect the total.

Holding both an undergraduate and a postgraduate loan means two separate deductions running simultaneously, at 9% above one threshold and 6% above another. Combined, that is a meaningful marginal rate on top of income tax and National Insurance — a Plan 2 graduate with a postgraduate loan earning above both thresholds faces 15% in loan deductions before any tax.

Repayments are collected through PAYE automatically, and through self assessment for the self-employed. Overpayments happen more often than they should — most commonly when someone continues paying after the loan is cleared, or when a bonus month triggers a deduction on an annual income below the threshold. Both are reclaimable, and the Student Loans Company does not always refund automatically.

Moving abroad requires notifying the SLC, with thresholds adjusted for the destination country. Failing to notify is a common and expensive mistake, since the SLC can apply a fixed default repayment rate that is far higher than the income-contingent amount would be.

The loan does not appear on a credit file and does not affect a credit score. It does affect mortgage affordability, because lenders count the deduction as a committed outgoing when assessing what you can borrow.

Assumptions and limitations

• The projection assumes constant salary growth and a constant interest rate, neither of which holds in practice
• Does not model income variation, career breaks or periods below the threshold
• Uses annual arithmetic, whereas repayments are actually deducted per pay period
• Does not model the income-linked interest variation on Plan 2
• Thresholds are reviewed annually and interest rates move with RPI and a market cap
• Does not handle the interaction of undergraduate and postgraduate loans in the projection
• Not financial advice — check your plan and balance with the Student Loans Company

Questions people ask about this in United Kingdom