Repaying your student loan
How much you repay
How much you repay depends on your income - the amount you earn (including things like bonuses and overtime) before tax and other deductions.
You’ll repay a percentage of your income over the ‘threshold’ for your type of loan, depending on how often you get paid.
The thresholds are different for each plan type.
| Plan type | Yearly threshold | Monthly threshold | Weekly threshold |
|---|---|---|---|
| Plan 1 | £24,990 | £2,082 | £480 |
| Plan 2 | £27,295 | £2,274 | £524 |
| Plan 4 | £31,395 | £2,616 | £603 |
| Plan 5 | £25,000 | £2,083 | £480 |
| Postgraduate Loan | £21,000 | £1,750 | £403 |
You’ll repay either:
- 9% of your income over the threshold if you’re on Plan 1, 2, 4 or 5
- 6% of your income over the threshold if you’re on a Postgraduate Loan plan
The examples show how much you’d repay depending on your income and plan type:
Example
You’re on Plan 1 and have an income of £33,000 a year, meaning you get paid £2,750 each month.
Calculation:
£2,750 – £2,082 (your income minus the Plan 1 threshold) = £668
9% of £668 = £60.12
This means the amount you’d repay each month would be £60.
Example
You’re on Plan 4 and have an income of £36,000 a year, meaning you get paid £3,000 each month.
Calculation:
£3,000 – £2,616 (your income minus the Plan 4 threshold) = £384
9% of £384 = £34.56
This means the amount you’d repay each month would be £34.
If your income changes during the year
You’ll make a repayment if your income goes over the weekly or monthly threshold for your plan (for example, if you’re paid a bonus or overtime). You can ask for a refund at the end of the tax year if your annual income is less than the yearly threshold for your plan.
Interest
How much interest you’re charged depends on which plan you’re on. You’re currently charged:
- 4.3% if you’re on Plan 1
- 4.3% if you’re on Plan 4
- 4.3% if you’re on Plan 5
- 7.3% if you’re on a Postgraduate Loan plan
If you’re on Plan 2
While you’re still studying, you’ll be charged 7.3% interest. The interest rate will change either:
- on 6 April after you finish or leave your course
- on 6 April 4 years after the course started, if you’re studying part-time and your course is longer than 4 years
After this time, you’ll start being charged interest based on your annual income.
| Annual income | Interest rate |
|---|---|
| £28,470 or less | 4.3% |
| £28,471 to £51,245 | 4.3%, plus up to 3% |
| £51,245 or more | 7.3% |
You can find out more about:
- how Plan 1 interest is calculated and interest rates for previous years
- how Plan 2 interest is calculated and interest rates for previous years
- how Plan 4 interest is calculated and interest rates for previous years
- how Plan 5 interest is calculated and interest rates for previous years
- how Postgraduate Loan interest is calculated and interest rates for previous years
If you’re on more than one plan type
How much you repay depends on which of your plan types has the lowest repayment threshold and whether or not you have a Postgraduate Loan.
If you do not have a Postgraduate Loan
You’ll repay 9% of your income over the lowest threshold out of the plan types you have. You’ll only have a single repayment taken each time you get paid, even if you’re on more than one plan type.
Example
You’re on Plan 1 and Plan 2 and have an income of £26,400 a year, meaning you get paid £2,200 each month. This is over the Plan 1 threshold of £2,082 but under the Plan 2 threshold of £2,274.
You’ll repay 9% of your income over £2,082 a month because that is the lowest threshold out of the plan types you have.
Calculation:
£2,200 – £2,082 (your income minus the lowest threshold) = £118
9% of £118 = £10.62
This means the amount you’d repay each month would be £10.
If your income went over the Plan 2 threshold, you’d still only repay 9% of your income over the Plan 1 threshold. You would not have to make a separate repayment towards your Plan 2 loan.
If you have a Postgraduate Loan
You’ll repay 6% of your income over the Postgraduate Loan threshold (£21,000 a year) and 9% of your income over the lowest threshold for any other plan types you have.
Example
You have a Postgraduate Loan and a Plan 2 loan and have an income of £28,800 a year, meaning you get paid £2,400 each month. This is over the Postgraduate Loan threshold of £1,750 and the Plan 2 threshold of £2,274.
Calculation:
£2,400 – £1,750 (your income minus the Postgraduate Loan threshold) = £650
6% of £650 = £39
£2,400 – £2,274 (your income minus the Plan 2 threshold) = £126
9% of £126 = £11
This means the amount you’d repay each month would be £50.
If you have more than one job
You’ll only make repayments from jobs where you’re paid over the threshold for your plan type, not your combined income.
Example
You have a Plan 1 loan and you have 2 jobs. Before tax and other deductions, you’re paid £1,000 a month from one job and £800 a month for the other.
You will not have to make repayments because neither salary is above the £2,082 a month threshold.
Example
You have a Plan 2 loan and you have 2 jobs. Before tax and other deductions, you’re paid £2,300 a month from one job and £500 a month for the other.
You will only make repayments on the income from the job that pays you £2,300 a month because it’s above the £2,274 threshold.
If you’re self-employed
HM Revenue and Customs (HMRC) will work out how much you repay each year from your tax return. Your repayments will be based on your income for the whole year.
If you’ve already made repayments from a salary, HMRC will deduct them from the amount you have to repay.