Money guide
Student loan repayments, explained
Your student loan behaves almost nothing like a normal debt, which is why normal debt instincts lead people astray. Understanding two things — the threshold and the write-off — tells you nearly everything you need.
The 2026/27 thresholds
- Plan 1 — repay above £26,900 a year
- Plan 2 — above £29,385
- Plan 4 (Scotland) — above £33,795
- Plan 5 — above £25,000
- Postgraduate loan — above £21,000
You repay 9% of income above the threshold (6% for postgraduate). Crucially, it's 9% of the excess, not of everything. On Plan 2 earning £35,000, you repay 9% of £5,615 — about £42 a month, not £262.
The write-off is the whole story
Plan 2 loans are written off 30 years after you became due to repay. Plan 5 loans run for 40 years. Plan 1 varies by when you started. For a large number of graduates — especially on Plan 2 with substantial interest — the balance is never cleared, and the total repaid depends purely on lifetime earnings, not on the size of the loan.
That reframes the "should I overpay?" question entirely. If you'd never clear it anyway, every voluntary pound is a pound you didn't need to pay.
When overpaying does make sense
It's worth considering if you're a high earner who will clearly repay the whole balance well before write-off — then reducing the balance genuinely reduces total interest. For nearly everyone else, that money does more good in a pension, an emergency fund, or a house deposit.
See what your plan costs you monthly →Add your plan to the calculator and watch your take-home update.Two loans at once
If you did a master's, you may be repaying an undergraduate plan and a postgraduate loan simultaneously — 9% above one threshold plus 6% above £21,000. Combined with tax and NI, that can push your effective marginal rate above 50% while you're still on a fairly ordinary salary. Worth knowing before you assume a pay rise will feel like one.
Check you're on the right plan
Being put on the wrong plan is common when starting a new job, and it means paying the wrong amount for months. Your online student loan account confirms which plan you're on — it takes two minutes and mistakes here are easy to fix.
Quick answers
Which student loan plan am I on?
Broadly: Plan 1 if you started before September 2012 in England or Wales, Plan 2 if you started between 2012 and July 2023, Plan 5 if you started from August 2023, and Plan 4 if you studied in Scotland. Check your online account if unsure.
How much do I repay?
9% of everything you earn above your plan threshold (6% for a postgraduate loan). If you have both an undergraduate and postgraduate loan you pay both at once.
Should I pay my student loan off early?
For most people on Plan 2 or Plan 5, no — it is written off after a set period and many never repay it in full. Overpaying only helps if you would realistically clear the whole balance before write-off.
Does my student loan affect my mortgage?
Indirectly. It does not appear on your credit file, but lenders count the monthly repayment as a committed outgoing, which reduces what you can borrow.
Written in plain English by mytakehome.money. General information, not financial advice — check anything important at gov.uk or with a qualified adviser.