What is the UK Student Loan?
UK student loans behave more like a graduate tax than a conventional debt. You repay 9% of income above a threshold, collected through PAYE, and any remaining balance is written off after 25 to 40 years depending on your plan.
Because of that write-off, many graduates never repay the full amount — which makes voluntary overpayment a poor decision for most people.
Formula & worked example
Plan 1: £26,900 / 25 yrs · Plan 2: £29,385 / 30 yrs
Plan 4: £33,795 / 30 yrs · Plan 5: £25,000 / 40 yrs
Worked example: £38,000 salary on Plan 2. You repay 9% of the £8,615 above the threshold = £65 a month. With a £48,000 balance growing at 7.3%, repayments never catch the interest, so the balance is written off after 30 years — you repay far less than you borrowed.
How to use this uk student loan calculator
- Enter your current salary and outstanding loan balance.
- Select your plan — it is determined by when and where you studied.
- Plan 2 interest is RPI plus up to 3% depending on income, subject to the interest rate cap HMRC and the Department for Education set each year.
- Check whether the projection shows the loan cleared or written off.
Smart tips
- Do not overpay unless you are confident you will clear the balance before write-off — otherwise you are gifting money you would never have paid.
- Repayments are income-contingent: if you earn below the threshold, you pay nothing at all.
- Plan 5 (from 2023) has a lower threshold but a 40-year term, so far more graduates will repay in full.
- The loan does not appear on your credit file and does not affect mortgage eligibility directly, though repayments reduce affordability.
- Balances are written off on death or permanent disability.
Frequently asked questions
How much do I repay on a UK student loan?
9% of income above your plan's threshold. On Plan 2 with a £38,000 salary that is about £65 a month.
When is a UK student loan written off?
25 years after repayment starts for Plan 1, 30 years for Plans 2 and 4, and 40 years for Plan 5.
Should I pay off my student loan early?
Usually not. Most graduates never clear the balance before write-off, so overpaying simply hands over money you would otherwise never pay.
Does a student loan affect my mortgage application?
Not via your credit file, but the monthly repayment reduces disposable income and therefore affordability.
Want the theory behind the numbers? Read our student loan guides on the Money Blog.
Written by Gurjeet Singh, Sharpen Solutions. Last reviewed 15 Oct 2026. Sources: GOV.UK — Repaying your student loan: plan thresholds and the 9% rate. How we check these numbers.