Student Loan Repayment Calculator 2026/27 — All Plans
UK student loans work unlike other debt — you only repay when earnings exceed a threshold, repayments stop if income drops, and the debt is written off after a set number of years regardless of balance. The five plans for 2026/27: Plan 1 (pre-2012, repay 9% above £24,990, written off at 65), Plan 2 (2012–2023, 9% above £27,295, written off after 30 years), Plan 4 (Scotland, 9% above £31,395), Plan 5 (2023+, 9% above £25,000, written off after 40 years), Postgraduate (6% above £21,000).
Student Loan Repayment Calculator for UK Graduates
Understanding your student loan repayments helps you plan your finances and know exactly what to expect on your payslip. This calculator shows your monthly repayments for all current student loan plans, including when your loan will be written off and the total you are likely to repay.
How student loan repayments work
UK student loans are income-contingent — you only repay when your income exceeds your plan's threshold. Repayments are collected through PAYE alongside your tax and National Insurance, so you never have to make manual payments if you are employed. If you are self-employed, repayments are calculated through your Self Assessment tax return.
The amount you repay depends on your income above the threshold, not your total loan balance. For example, with Plan 2 (threshold £28,030 for 2026/27), you pay 9% of everything you earn above £28,030. Someone earning £35,000 pays 9% of £6,970 = £627 per year, or about £52 per month. The repayment is the same whether you owe £20,000 or £60,000.
When is your loan written off?
Plan 1 loans are written off after 25 years (or when you reach age 65, whichever is sooner). Plan 2 loans are written off after 30 years. Plan 4 loans after 30 years. Plan 5 loans after 40 years. Postgraduate loans after 30 years. Because many graduates will not fully repay within these timeframes, the effective cost of student loans is often much lower than the headline interest rate suggests.
Should you overpay your student loan?
For most graduates, overpaying a student loan is not financially optimal. The loan is wiped after 25-40 years, so aggressive overpayments may simply mean you pay back money that would have been written off. A better use of spare money is usually paying into a pension (where you get tax relief) or building an emergency fund. Only consider overpaying if you are a very high earner who will definitely clear the balance.
UK Student Loan Plans Explained
The UK has five active student loan repayment plans, each with different thresholds, interest rates, and write-off periods. Knowing which plan you are on is essential because it determines how much you repay each month and whether overpaying makes financial sense.
| Plan | Who | 2026/27 Threshold | Rate | Write-Off |
|---|---|---|---|---|
| Plan 1 | England/Wales/N.I. pre-2012 | £22,015 | 9% | 25 years (65 if earlier) |
| Plan 2 | England/Wales 2012–2022 | £27,295 | 9% | 30 years |
| Plan 4 | Scotland | £27,660 | 9% | 30 years |
| Plan 5 | England from Sept 2023 | £25,000 | 9% | 40 years |
| PG | Masters/Doctoral | £21,000 | 6% | 30 years |
Key point: You only repay while your income is above the threshold. If your salary drops below the threshold, repayments stop automatically. This makes student loans more like a "graduate tax" than conventional debt.
Should You Overpay Your Student Loan?
This is the most common question graduates ask. The answer depends entirely on your plan, balance, expected career earnings, and interest rate.
When Overpaying Makes Sense
- Plan 2 with high interest and high salary: If you earn £60,000+ with a £40,000 balance at 7% interest, you will likely clear the loan before the 30-year write-off. Overpaying saves thousands in interest.
- Small balance remaining: If you have £3,000 left and a pay rise coming, clearing it removes the administrative burden and frees up monthly cash flow.
- Psychological benefit: Some people simply hate having debt. If the mental relief is worth more than the mathematical optimum, overpay.
When Overpaying Is Wasted Money
- Low earners on Plan 2: If you earn £30,000 with a £50,000 balance, you will never repay in full. The balance is written off after 30 years. Overpayments are effectively a donation to the Treasury.
- Plan 1 borrowers: The interest rate is low (~4.3%) and the write-off is 25 years. If you have a mortgage or credit card debt at a higher rate, pay those first.
- You have no emergency fund: Never overpay a student loan if you lack 3–6 months of expenses in cash. Student loans do not affect your credit score; missed rent or mortgage payments do.
✅ The Martin Lewis Rule
MoneySavingExpert founder Martin Lewis advises: only overpay if you would clear the full balance including projected interest before the write-off date. Otherwise, treat it as a tax and put spare money into a pension or ISA instead.
How Interest Accrues on Student Loans
Interest is calculated daily and added monthly. The rate depends on your plan and, for Plan 2, your income:
- Plan 1: Lower of RPI or Bank of England base rate + 1%. Currently ~4.3%.
- Plan 2: RPI + 0% to 3% depending on income. At £27,295 or below: RPI only. Above £49,130: RPI + 3%. Sliding scale between. Currently capped at ~7.3%.
- Plan 4: RPI only. Currently ~4.3%.
- Plan 5: RPI only. Currently ~4.3%.
- Postgraduate: RPI + 3%. Currently ~7.3%.
Because interest compounds monthly, a £45,000 Plan 2 balance at 7% grows by roughly £263/month in interest alone. If your repayments are lower than the monthly interest, your balance increases even though you are paying — this is called negative amortisation.
Frequently Asked Questions
Do student loans affect my credit score?
No. Student loans do not appear on your credit file and do not affect your ability to get a mortgage, credit card, or car finance. However, mortgage lenders may ask about your monthly student loan repayment when calculating affordability, as it reduces your disposable income.
What happens if I move abroad?
You must still repay. The Student Loans Company requires overseas borrowers to complete an Overseas Income Assessment Form annually. Thresholds vary by country (e.g., Australia threshold is roughly £28,000 equivalent). If you fail to report your income, SLC can impose fixed monthly amounts and pursue debt through international collection agencies.
Can I claim tax relief on student loan interest?
No. Unlike US student loans, UK student loan interest is not tax-deductible. Your repayments are taken from post-tax income. The only tax interaction is that student loan repayments are calculated on your gross income before pension contributions, so salary sacrifice into a pension can reduce your student loan bill indirectly.
What is salary sacrifice and how does it affect repayments?
Salary sacrifice is when you agree to reduce your gross salary in exchange for a non-cash benefit, typically pension contributions. Because student loan repayments are based on gross income, reducing your salary by £5,000 via pension sacrifice reduces your annual student loan repayment by £450 (9% of £5,000 on Plan 2). You also save Income Tax and NICs. This is one of the most powerful — and legal — ways to reduce student loan costs while building wealth.
Can I have more than one student loan plan?
Yes. Many graduates have both an undergraduate Plan 2 loan and a separate Postgraduate Loan. You repay both simultaneously: 9% of income above the Plan 2 threshold (£27,295) AND 6% of income above the Postgrad threshold (£21,000). If you earn £35,000, you pay 9% of £7,705 (£693.45) plus 6% of £14,000 (£840) = £1,533.45/year total. The two loans are administered separately but both are deducted via PAYE or Self Assessment.
Sources & Methodology
All calculations are verified against official HMRC thresholds and rates for the 2026/27 tax year. Figures are updated within 24 hours of any HMRC announcement. Calculations are for guidance only — consult a qualified accountant for personalised advice.