How the UK student loan payment calculator works
This student loan payment calculator gives you a clear picture of what you owe, what you repay each month and how long it will take to clear your student debt in the 2026 tax year. I have built it to handle all five current student loan plans in the UK: Plan 1, Plan 2, Plan 4 (Scotland), Plan 5, and Postgraduate Loans. Each plan has its own repayment threshold, rate and write-off period, and this calculator applies the correct rules for whichever plan you select.
The calculation starts with your gross annual salary. If your income exceeds the repayment threshold for your plan, you repay 9% of every pound earned above that threshold. For Postgraduate Loans, the rate is 6% instead. This repayment is deducted automatically through PAYE, just like Income Tax and National Insurance, so you will see it on your payslip each month.
For the 2025/26 tax year, the thresholds are: Plan 1 at £26,900 per year, Plan 2 at £29,385 per year, Plan 4 at £33,795 per year, Plan 5 at £25,000 per year, and Postgraduate Loans at £21,000 per year. If your salary is below your plan's threshold, you do not repay anything at all. This is one of the key protections built into the student loan system, ensuring that lower earners are never burdened with repayments they cannot afford.
Beyond the basic monthly repayment figure, this calculator projects your repayments forward year by year. It takes your outstanding balance, applies the interest rate you specify, adds a year of interest to the balance, then subtracts your annual repayment. This process repeats until either the balance reaches zero or you hit the write-off point for your plan. The result tells you whether you will fully repay your loan or have the remaining balance written off.
The interest rate input defaults to 7.3%, which is the approximate rate for Plan 2 borrowers in the current period (RPI plus 3%). However, interest rates vary between plans and change with inflation, so you should check your Student Loans Company statement for your personal rate and enter it here for a more accurate projection.
I have also included several additional results to help you understand the true cost of your student loan. You will see the total amount you end up repaying over the full repayment period, how much of that total is interest rather than principal, and whether the loan gets written off before you finish paying. The calculator also shows your monthly repayment as a percentage of your gross salary, which helps you put the cost in perspective alongside your other outgoings.
All figures use the verified HMRC thresholds for the 2026 tax year. The thresholds and rates are reviewed annually by the government, and I update this calculator each time new values are published, so the numbers you see always reflect current legislation.
Understanding UK student loan plans and repayment thresholds in 2026
The UK student loan system can feel confusing because there are now five different plans, each with its own rules. Knowing which plan you are on and understanding its specific threshold is essential for working out what you actually repay. Let me walk through each plan and explain the differences.
Plan 1 is the oldest active plan. It applies to borrowers who started undergraduate courses in England or Wales before September 2012, or who took student loans in Northern Ireland at any time. The repayment threshold for Plan 1 in the 2025/26 tax year is £26,900 per year. You repay 9% of your income above that amount. Plan 1 loans are written off 25 years after the April you were first due to repay. The interest rate on Plan 1 is the lower of RPI or the Bank of England base rate plus 1%, which typically makes it one of the cheapest forms of borrowing.
Plan 2 is the most common plan for current graduates. It covers anyone who started an undergraduate course in England or Wales from September 2012 onwards. The threshold for Plan 2 is £29,385 per year, and the repayment rate is 9%. Plan 2 loans are written off after 30 years. The interest rate on Plan 2 is more complex than Plan 1. While studying, you are charged RPI plus 3%. After graduating, the rate scales between RPI only (if you earn at or below the threshold) and RPI plus 3% (if you earn £49,130 or more). This means higher earners pay more interest, which is an important factor when deciding whether to make voluntary overpayments.
Plan 4 is the Scottish plan. It applies to students who took loans from the Student Awards Agency for Scotland (SAAS). The threshold is higher than other plans at £33,795 per year, reflecting Scotland's different approach to higher education funding. Repayment is still 9% of income above the threshold, and the loan is written off after 30 years. Interest is charged at the lower of RPI or the Bank of England base rate plus 1%, the same as Plan 1.
Plan 5 is the newest plan, introduced for students starting courses in England from August 2023. The threshold is £25,000 per year, and the repayment rate is 9%. The key difference with Plan 5 is the write-off period: 40 years, significantly longer than any other plan. This means borrowers will be making repayments well into their sixties if they do not clear the balance sooner. The interest rate on Plan 5 is capped at RPI only, with no additional percentage added, which is more favourable than Plan 2.
Postgraduate Loans are separate from undergraduate loans and can run concurrently. If you took a Master's or Doctoral loan, you repay 6% of income above the threshold of £21,000 per year. This repayment is collected in addition to any undergraduate loan repayment, not instead of it. Postgraduate Loans are written off after 30 years.
One common misconception is that moving between plans is possible. In general, it is not. Your plan is determined by when and where you studied, and you cannot choose to switch to a plan with a higher threshold or longer write-off period. If you have loans from different periods, you may have balances on more than one plan, and each is repaid independently under its own rules. Check your Student Loans Company annual statement if you are unsure which plan or plans you are on.
Student loan interest rates and the write-off explained
Interest on student loans is one of the most misunderstood aspects of the system. Many graduates are shocked to see their balance growing even while they are making regular repayments. Understanding how interest works on your student loan is essential for deciding whether to make extra payments or simply let the repayment system run its course.
The interest on your student loan accrues daily on your outstanding balance. It is added monthly, which means your balance can grow even while you are repaying. This is perfectly normal and happens to the vast majority of borrowers. Whether it matters financially depends on whether you will end up repaying the full balance or having it written off.
For Plan 2 borrowers, which is the largest group, interest is currently charged at RPI plus up to 3%. The Retail Prices Index (RPI) measures inflation, and in recent years it has been relatively high, pushing Plan 2 interest rates to around 7% or more. This means a graduate with a £40,000 loan could see roughly £2,920 in interest added to their balance in a single year. If their annual repayments are less than that, the balance actually grows rather than shrinks.
Plan 1 and Plan 4 borrowers benefit from a much lower interest rate. Their rate is the lower of RPI or the Bank of England base rate plus 1%. Historically this has hovered between 1% and 5%, making these some of the cheapest loans available. Plan 5 borrowers pay RPI only with no additional loading, which is more favourable than Plan 2 but still subject to inflation fluctuations.
The write-off is the safety net that makes student loans fundamentally different from commercial debt. After a set number of years, any remaining balance is simply cancelled. You owe nothing further, and the written-off amount does not count as taxable income. The write-off periods are: 25 years for Plan 1, 30 years for Plans 2 and 4, 40 years for Plan 5, and 30 years for Postgraduate Loans.
Whether your loan gets written off depends on the interplay between your salary, interest rate and time. If you earn a high salary, your large repayments may outpace the interest and clear the balance before the write-off date. If you earn a more modest salary, interest may accumulate faster than your repayments reduce the balance, meaning the debt is eventually written off with a large amount still outstanding.
This distinction is important when considering voluntary overpayments. If your loan will be written off before you finish paying, every extra pound you put towards it is money you did not need to spend, because that balance would have been cancelled anyway. Conversely, if you are on track to fully repay, extra payments reduce the interest you pay over the life of the loan and can save you money.
This calculator helps you work out which group you fall into. Enter your salary, balance and interest rate, and check whether the result shows "Written off before full repayment: Yes" or "No." If your loan will be written off, there is generally no financial benefit to making voluntary overpayments. If you will fully repay, overpayments could save you thousands in interest over the long term.
Martin Lewis of MoneySavingExpert, a widely trusted UK financial expert, has repeatedly made this point: for most Plan 2 borrowers on average salaries, the loan will be written off, and paying extra is like overpaying a tax that would have been cancelled. The maths will be different for high earners, which is why running your own numbers through this calculator is so valuable.
Practical tips for managing your student loan in 2026
Managing your student loan effectively is not about rushing to pay it off. For many UK graduates, the smartest approach is to understand the system and let it work as designed. Here are practical, evidence-based tips for handling your student loan in 2026.
First, check your payslip regularly. Student loan repayments are deducted automatically through PAYE, and errors do happen. The Student Loans Company (SLC) relies on HMRC data to determine your income, and occasionally repayments continue after a loan has been fully repaid. If you believe you have been overcharged, contact the SLC directly, as they will investigate and refund any overpayments. According to gov.uk, thousands of graduates receive refunds each year due to processing delays.
Second, keep track of your balance. The SLC sends an annual statement showing your balance, interest charged and repayments made. Compare this to the projections from this calculator to check whether you are on track. If your balance is growing year on year despite regular repayments, that is not unusual. It simply means interest is accruing faster than your repayments reduce the principal, which is the reality for many Plan 2 borrowers on average salaries.
Third, understand the voluntary overpayment decision. As I explained in the previous section, whether overpayments make sense depends on whether you will fully repay before the write-off date. Use this calculator to project your situation. If the answer is that your loan will be written off, you are better off putting any spare cash into a savings account, pension, or ISA where it will work harder for you. If you will fully repay, overpayments reduce the total interest you pay and can shorten the repayment period.
Fourth, be aware of how salary changes affect your repayments. If you receive a pay rise, your monthly repayment increases because a larger portion of your income sits above the threshold. Conversely, if your income drops, repayments decrease automatically. This makes student loans much less risky than traditional debt, because the repayment always scales with your ability to pay.
Fifth, consider the impact of multiple loans. If you hold both an undergraduate and a Postgraduate Loan, both repayments are collected simultaneously. On Plan 2 with a Postgraduate Loan, you could be repaying 9% plus 6% on income above the respective thresholds, a combined 15% on certain portions of your earnings. This can feel steep, so it is worth running the numbers for each loan separately and understanding the combined impact on your take-home pay.
Sixth, if you are self-employed, your student loan repayments are calculated and collected through your Self Assessment tax return rather than PAYE. The rates and thresholds are the same, but the timing is different: you pay in a lump sum once a year (or in payments on account) rather than monthly. Make sure to set aside enough to cover your student loan alongside your Income Tax and National Insurance.
Finally, remember that student loan debt does not affect your credit score. It does not appear on your credit report and lenders cannot see your balance. However, some mortgage lenders may take your student loan repayment into account when assessing affordability, because it reduces your disposable income. If you are planning to buy a home, use this calculator alongside a mortgage affordability tool to get a complete picture of your monthly commitments.
The student loan system in the UK is designed to be manageable. Repayments are proportional to income, there is a safety net through the write-off, and you never face the kind of aggressive collection that comes with commercial debt. The best thing you can do is understand the numbers, which is exactly what this calculator helps you achieve.