Navigating Student Loan Repayments in the UK: A Complete Guide for 2025/26
Alex Doe
Understanding how and when you repay your student loan is a crucial part of managing your finances after university. Unlike other types of debt, student loan repayments in the UK are income-contingent, meaning what you pay back is directly linked to how much you earn. This guide breaks down each repayment plan for the 2025/2026 tax year so you can understand exactly how it affects your take-home pay.
Which Student Loan Plan Am I On?
Your repayment plan depends on where you were living when you took out the loan and when you started your course. This is the most important factor in determining your repayment threshold and interest rate. Our salary calculator lets you select your specific plan for an accurate calculation.
Student Loan Repayment Calculator
Estimate your loan repayments for your selected tax year.
Total Monthly Repayment
£57.79
Total Annual Repayment
£693.45
Repayment Breakdown
| Plan | Threshold | Monthly | Annually |
|---|---|---|---|
| Plan 2 | £27,295 | £57.79 | £693.45 |
| Plan | Who is it for? |
|---|---|
| Plan 1 | Students in England and Wales who started before 1 Sep 2012. Northern Irish students who started after 1 Sep 1998. |
| Plan 2 | Students in England and Wales who started on or after 1 Sep 2012. |
| Plan 4 | Scottish students who started after 1 Sep 1998. |
| Plan 5 | Students in England who started on or after 1 Aug 2023. |
| Postgraduate | Students from England or Wales on a postgraduate Master's or Doctoral loan. |
How to Apply for Student Finance
While this guide focuses on repayments, it's important to know where to apply for funding in the first place, as this differs depending on where you normally live.
- 🏴Students from England: You apply through Student Finance England.
- 🏴Students from Scotland: You apply through the Student Awards Agency Scotland (SAAS). Their funding system and repayment terms (Plan 4) are different.
- 🏴Students from Wales: You apply through Student Finance Wales. They have their own specific grants and funding arrangements.
- Students from Northern Ireland: You apply through Student Finance NI.
Student Loan Repayment Details (2025/26)
Once your income goes over the annual threshold for your plan, you will start repaying your loan. The amount is calculated as a percentage of your earnings *above* that threshold, not on your total salary.
Plan 1
- Repay when your income is over: £24,990 a year (£2,082 a month or £480 a week)
- Repayment Rate: 9% on income above the threshold
- Interest Rate: The lower of the Retail Price Index (RPI) or the Bank of England base rate + 1%. Currently 6.25%.
- Written Off: After 25 years for most, or when you reach age 65.
Plan 2
- Repay when your income is over: £27,295 a year (£2,274 a month or £524 a week)
- Repayment Rate: 9% on income above the threshold
- Interest Rate: RPI + up to 3% (depending on your income). Currently up to 7.9%.
- Written Off: 30 years after you become eligible to repay.
Plan 4 (Scottish Students)
- Repay when your income is over: £31,395 a year (£2,616 a month or £603 a week)
- Repayment Rate: 9% on income above the threshold
- Interest Rate: The lower of the Retail Price Index (RPI) or the Bank of England base rate + 1%. Currently 6.25%.
- Written Off: 30 years after you become eligible to repay, or when you turn 65.
Plan 5
- Repay when your income is over: £25,000 a year (£2,083 a month or £480 a week)
- Repayment Rate: 9% on income above the threshold
- Interest Rate: RPI only. Currently 5.4%.
- Written Off: 40 years after you become eligible to repay.
Postgraduate Loan
- Repay when your income is over: £21,000 a year (£1,750 a month or £403 a week)
- Repayment Rate: 6% on income above the threshold
- Interest Rate: RPI + 3%. Currently 7.9%.
- Written Off: 30 years after you become eligible to repay.
How are repayments made?
For most people, repayments are simple and automatic. If you're employed, your employer will calculate and deduct the repayments directly from your salary through the PAYE (Pay As You Earn) system, just like income tax and National Insurance. If you're self-employed, you'll repay through your annual Self Assessment tax return.
Conclusion
While the different plans and figures can seem daunting, the UK student loan system is designed to be manageable. By understanding your specific plan and knowing that repayments will only be taken when you can afford them, you can budget effectively and focus on your career without financial worry. Remember to select the correct plan in our calculator for a precise breakdown of your take-home pay.