UK Student Loan Calculator 2026: Repayment Plans, Thresholds and Write-Off
Updated April 2026 · 10 min read
UK Student Loans: Not Really a Loan
UK student loans work more like a graduate tax than a traditional loan. You only repay when earning above the threshold (GBP 27,295 for Plan 2). Repayment is automatic through PAYE at 9 percent of earnings above the threshold. If you lose your job or earn below the threshold, repayments stop. After 30 years (Plan 2) or 40 years (Plan 5), remaining debt is written off. This makes UK student loans fundamentally different from US or other country student debt.
Use our salary calculator to see exactly how student loan repayments affect your take-home pay alongside income tax and National Insurance.
Why Voluntary Repayment Is Usually Wrong
The Institute for Fiscal Studies estimates 73 percent of Plan 2 graduates will never fully repay. If your loan will be written off anyway, every voluntary pound repaid is a pound wasted. Only high earners who will clear the full balance should consider voluntary repayment. For everyone else, that money is better invested in a pension (tax relief) or ISA (tax-free growth).
Plan your finances around the repayment reality. Budget using our budget planner and loan calculator. Factor in your student loan deduction alongside tax and NI to get your true take-home pay.
Try These Free Calculators
Frequently Asked Questions
How much student loan do I repay each month?
9 percent of everything earned above the threshold. Plan 2 threshold: GBP 27,295. On a GBP 35,000 salary: (35,000 minus 27,295) times 9 percent equals GBP 693 per year or GBP 58 per month. Postgraduate loans add 6 percent above GBP 21,000.
When is my student loan written off?
Plan 1: 25 years after first becoming eligible. Plan 2: 30 years. Plan 5 (post-2023): 40 years. Most graduates on Plan 2 will never fully repay — the Institute for Fiscal Studies estimates 73 percent will have debt written off.
Does student loan affect my credit score?
No. UK student loans do not appear on your credit file and do not affect your credit score. However, mortgage lenders do factor your student loan repayments into affordability calculations, which reduces your maximum borrowing amount.
Should I voluntarily repay my student loan faster?
For most graduates, no. If you will not repay in full before write-off, voluntary repayments are money wasted. Only consider voluntary repayment if you are a very high earner (GBP 60,000+) who will repay in full anyway and want to reduce interest costs.
What interest rate do I pay on my student loan?
Plan 2: RPI while studying, then RPI to RPI plus 3 percent based on income after graduation. Plan 5: capped at RPI only (a significant improvement). Plan 1: whichever is lower of RPI or Bank of England base rate plus 1 percent.