The date you start repaying your student loan and how you’ll have to pay depends on which repayment plan you’re on and the interest rate. The amount you repay changes in April every year and you’ll also stop repaying if your income drops below a certain amount.
If you’re a student in England, Scotland, Northern Ireland or Wales and started your undergraduate course before 1st September 2012, you’re on Plan 1. You’ll start repaying your loan the April after you leave your course if you earn more than £1,527 per month before tax and other deductions.
If you’re a student in England or Wales and started your course on or after 1st September 2012, you’re on Plan 2. You’ll start paying your student loan back in the April after you leave your course, when you earn more than £2,083 per month before tax and other deductions.
If you’re a student in England or Wales who took out a Postgraduate Doctoral Loan or Postgraduate Master’s Loan, you’ll only start paying your loan back when you earn more than £1,750, before tax and other deductions.
How much you will pay
For Plan 1 and 2 you’ll pay 9% of the amount you earn over the threshold. For the Postgraduate Loan you’ll pay 6% of the amount you earn over the threshold.
If you’re on Plan 1 or 2 and have a Postgraduate Loan too, you’ll repay 15% of the amount you earn over the threshold.
Student loan interest rates
Interest is added to your loan as soon as you get your first payment. All rates are based on that at November 2018.
- The interest rate for Plan 1 is 1.75%.
- While you’re studying, interest for Plan 2 is 6.3%. This is made up of the Retail Price Index (RPI) plus 3%. RPI is currently set at 3.3%.
- The current interest on Postgraduate Loans is 6.3%.
- Once you’ve left your course, interest depends on your income in the current tax year.
- If you have more than one job, the interest rate will depend on your total income.
Current interest rates:
- RPI (3.3%) for an annual income of £25,000 or less.
- RPI (3.3%), plus up to 3% for an annual income of £25,000 to £45,000.
- RPI (3.3%), plus 3% for an annual income of Over £45,000.
Student loan interest rates are updated every September, based on the RPI from March.
Important things to know
- There’s no penalty for paying all or some of your loan off early.
- Your repayments will be taken from your salary at the same time as tax and National
- Insurance and your payslips will show how much has been taken.
- If you work abroad, student loan repayment rules are the same.
- You can check your repayments and balance with the Student Loans Company.
So, while it may affect your student loan, the amount you have to pay and when you have to pay it back depends on when you started studying, when you left your course and how much you earn now.