To calculate UK student loan repayments, take the percentage of your earnings above your plan's threshold: 9 percent for Plans 1, 2, 4 and 5, and 6 percent for postgraduate loans. For example, on Plan 2 in 2026/27, a salary of £38,000 gives 9 percent of £8,615 above the £29,385 threshold, which is £775.35 a year, or £64.61 a month, collected through payroll. The free UK Student Loan Repayment Calculator runs the same calculation for your plan and salary. General information only — not financial advice, and not tax advice.
Which Plan Are You On?
Your plan is decided by when and where you studied, not by choice. Plan 1 covers students who started before September 2012 in England and Wales, and students in Northern Ireland. Plan 2 covers England and Wales from 2012 to July 2023. Plan 4 covers Scotland. Plan 5 covers England from August 2023. Postgraduate loans sit alongside an undergraduate loan for borrowers who hold both, and the two repayments are collected together. If you are unsure which plan applies to you, the Student Loans Company statement or the calculator's plan descriptions will settle it — guessing the plan is the single most common source of a wrong repayment figure, because the thresholds differ by thousands of pounds.
The thresholds for 2026/27, as shown on the tool page from GOV.UK guidance, are: Plan 1 £26,900 at 9 percent, Plan 2 £29,385 at 9 percent, Plan 4 £33,795 at 9 percent, Plan 5 £25,000 at 9 percent, and Postgraduate £21,000 at 6 percent. Two features of the system surprise first-time borrowers. First, repayments are a percentage of earnings above the threshold, not a percentage of total earnings: income below the threshold attracts no repayment at all. Second, repayments are collected through payroll, like tax, so they arrive as a deduction you may barely notice — which is also why they are easy to overlook when comparing job offers or estimating take-home pay.
Using the UK Student Loan Repayment Calculator, Step by Step
- Confirm your plan. Use the when-and-where rules above, and cross-check against your Student Loans Company statement. A borrower with both an undergraduate and a postgraduate loan should model both repayments, not just one.
- Enter your annual salary before tax. Use gross salary, not take-home pay: the threshold comparison is made against gross earnings, and using net pay understates the repayment.
- Read the monthly and annual repayment. The calculator shows both, because the annual figure suits yearly planning while the monthly figure is what actually leaves your payslip.
- Test a higher salary. A pay rise does not raise repayments pound for pound: only 9 percent (or 6 percent for postgraduate) of the rise above the threshold is taken. Testing the next salary band shows the true cost of a promotion in loan terms.
- Compare the repayment with the balance and the write-off date. A monthly repayment figure alone does not tell you whether the loan will ever be cleared. The write-off rules below decide whether extra payments help or waste money.
Compare gross, not net: the most common calculator error is entering take-home pay. Thresholds apply to gross earnings, so entering a net figure understates the repayment — sometimes to zero, when the true repayment is hundreds of pounds a year.
The Five Plans at a Glance: 2026/27 Thresholds and Rates
| Plan | Who it covers | 2026/27 threshold | Rate above threshold | Write-off |
|---|---|---|---|---|
| Plan 1 | Before Sept 2012, England/Wales; Northern Ireland | £26,900 | 9% | After 25 years |
| Plan 2 | England/Wales, 2012–July 2023 | £29,385 | 9% | After 30 years |
| Plan 4 | Scotland | £33,795 | 9% | After 30 years |
| Plan 5 | England from Aug 2023 | £25,000 | 9% | After 40 years |
| Postgraduate | Postgraduate, alongside undergraduate | £21,000 | 6% | After 30 years |
Write-off periods run from the April after leaving the course, not from the first repayment. The differences are large: a Plan 1 borrower is free after 25 years, a Plan 5 borrower after 40. That fifteen-year gap is why two graduates with identical salaries and identical balances can face very different lifetime repayments, and why Plan 5 borrowers should think hardest about the overpayment question below.
Worked Example: Plan 2 at £38,000, and the Same Salary on Other Plans
The headline example, taken from the tool page, is a Plan 2 borrower earning £38,000. Earnings above the £29,385 threshold are £38,000 minus £29,385, which equals £8,615. Nine percent of £8,615 is £775.35 a year; divided by 12, that is £64.6125 a month, shown as £64.61. Every step of that arithmetic is checkable with a pocket calculator, and it is worth checking, because the formula is the whole system: threshold, subtraction, percentage, division by twelve. The same salary on other plans gives different results, because the thresholds and rates differ: Plan 1 gives 9 percent of £11,100, which is £999.00 a year; Plan 4 gives 9 percent of £4,205, which is £378.45 a year; Postgraduate gives 6 percent of £17,000, which is £1,020.00 a year. A borrower holding both a Plan 2 and a postgraduate loan would pay both repayments, £775.35 plus £1,020.00, totalling £1,795.35 a year at this salary — a combined figure that surprises many dual borrowers the first time they see it.
| Salary and plan | Above threshold | Yearly repayment | Monthly repayment |
|---|---|---|---|
| Plan 2, £38,000 | £8,615 | £775.35 | £64.61 |
| Plan 1, £38,000 | £11,100 | £999.00 | £83.25 |
| Plan 4, £38,000 | £4,205 | £378.45 | £31.54 |
| Postgraduate, £38,000 | £17,000 | £1,020.00 | £85.00 |
The table also shows why salary growth matters less than borrowers fear. Raising a Plan 2 salary from £38,000 to £45,000 adds £7,000 of earnings, but only 9 percent of that £7,000 — £630 a year — is added to repayments, taking the yearly total from £775.35 to £1,405.35. The borrower keeps £6,370 of the £7,000 rise before other taxes. Student loan repayments are real money, but they are a slice of the rise, not the whole rise.
Plan 2 yearly repayment by salary at the £29,385 threshold, 9 percent above it — hover or tap each bar for details.
The chart shows the system's shape: repayments start at zero below the threshold, then rise steadily at 9 percent of each additional pound. There is no cliff edge at the threshold — earning one pound more does not trigger a repayment on the whole salary, only 9 pence on that pound. That gradual slope is the feature of the system most often misunderstood, and it is the reason a salary just above the threshold produces a very small repayment: at £30,000, only £55.35 a year.
Interest, Write-Off, and the Overpayment Trap
Interest rates differ by plan, and they affect the balance even though they do not affect the monthly repayment, which is set by salary alone. Plan 1 and Plan 4 charge the lower of RPI or the Bank Rate plus 1 percent. Plan 5 charges RPI only. Postgraduate loans charge RPI plus 3 percent. Plan 2 slides from RPI up to RPI plus 3 percent as income rises. Interest therefore grows the balance fastest for higher earners on Plan 2 and for postgraduate borrowers, which can make balances look alarming even while monthly repayments remain modest. The balance matters only if the loan will be cleared before write-off; otherwise, it is a number that will partly be written off, and paying it down early changes nothing except the amount written off.
That is the overpayment trap, and the tool page's example states it plainly. A Plan 2 borrower with a £45,000 balance and 3 percent salary growth repays about £67,821 over the life of the loan, with roughly £83,961 written off in 2053. Overpaying that loan would not reduce the total repaid by a pound unless the overpayments were large enough to clear the loan in full before write-off — and if they fell short, every overpaid pound would simply reduce the amount written off, not the amount the borrower ultimately pays. Overpay only when you are on course to clear the loan in full before its write-off date. For most borrowers, whose balances exceed what salary-based repayments will clear, the rational choice is to let the payroll system run and to direct spare money to savings, a deposit or higher-interest debts instead.
The Credit File Question, and Lenders' View
A student loan is not recorded on your credit file in the way a bank loan or credit card is, and repayments do not change your credit score. That surprises borrowers who expect a large balance to damage their borrowing record. Lenders, however, do count the repayments as committed spending when assessing affordability for a mortgage or other loan: a £64.61 monthly deduction reduces the income a lender treats as available, even though the loan itself does not appear as a debt on the file. When applying for a mortgage, declare the repayment accurately and let the lender's affordability calculation handle it; hiding it risks a declined application later, when payslips reveal the deduction in any case.
Common Mistakes With UK Student Loan Repayments
1. Using the wrong plan. Thresholds differ by thousands of pounds between plans. Confirm the plan from your statement before calculating anything.
2. Entering take-home pay instead of gross salary. Thresholds apply to gross earnings. Net-pay inputs understate repayments, sometimes to zero.
3. Treating the repayment as a percentage of total salary. Only earnings above the threshold are charged, at 9 or 6 percent. A salary just above the threshold produces a small repayment, not a large one.
4. Overpaying a loan that will be written off anyway. Unless overpayments clear the loan in full before write-off, they reduce only the written-off amount, not what you pay.
5. Ignoring a second loan. Postgraduate repayments sit alongside undergraduate ones and are collected together. Model both, or the monthly deduction will look unexpectedly large.
Key takeaway: UK student loan repayments are 9 percent (6 percent for postgraduate) of earnings above your plan's threshold, collected through payroll — £775.35 a year, or £64.61 a month, for a Plan 2 salary of £38,000. Overpay only if you will clear the loan before write-off; otherwise, let the system run and use spare money elsewhere.
Frequently Asked Questions
How do I calculate UK student loan repayments?
Subtract your plan's threshold from your gross annual salary, then take 9 percent of the remainder for Plans 1, 2, 4, 5, or 6 percent for postgraduate loans, and divide by 12 for the monthly figure. For Plan 2 at £38,000: 9 percent of £8,615 is £775.35 a year, or £64.61 a month.
Which student loan plan am I on?
Plan 1 covers starts before September 2012 in England and Wales, and Northern Ireland. Plan 2 covers England and Wales from 2012 to July 2023. Plan 4 covers Scotland. Plan 5 covers England from August 2023. Postgraduate loans sit alongside undergraduate loans. Check your Student Loans Company statement to confirm.
What are the 2026/27 student loan thresholds?
Plan 1 £26,900, Plan 2 £29,385, Plan 4 £33,795, Plan 5 £25,000, all at 9 percent above the threshold; Postgraduate £21,000 at 6 percent. These are the thresholds shown on the tool page from GOV.UK guidance.
Do student loan repayments affect my credit score?
No. The loan is not on your credit file and repayments do not change your credit score. Lenders do, however, count the repayments as committed spending when assessing affordability for mortgages and other loans.
Should I overpay my student loan?
Only if you are on course to clear it in full before its write-off date. Otherwise overpayments reduce only the amount eventually written off, not the total you pay — as in the tool page example, where roughly £83,961 is written off in 2053 despite about £67,821 being repaid.
When is a student loan written off?
From the April after leaving the course: after 25 years for Plan 1, 30 years for Plan 2, Plan 4 and Postgraduate, and 40 years for Plan 5. Any balance remaining at that point is written off.
How is student loan interest charged?
Plan 1 and Plan 4 charge the lower of RPI or the Bank Rate plus 1 percent; Plan 5 charges RPI only; Postgraduate charges RPI plus 3 percent; Plan 2 slides from RPI to RPI plus 3 percent as income rises. Interest grows the balance but does not change the salary-based monthly repayment.
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Run your own figures in the UK Student Loan Repayment Calculator, and browse more money guides on the Asad Webs blog.
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