Official feature, written by the Student Loans Company

You might not be thinking about how you’ll repay your student loan right now, but as you’re finishing your course and graduating it’s really important you know exactly what’s involved and understand your responsibilities when it comes to repaying your loan.

Student Loans Company provides financial support on behalf of the UK government, through Student Finance England (SFE). When the time comes to repay your loan, you’ll make repayments to SLC.

When am I charged interest on my student loan?

We know this is one of the most common misunderstandings about repaying your student loan.

Interest is charged from the day we make your first payment until your loan is repaid in full or cancelled after 30 years.

The interest rate is based on the Retail Price Index (RPI) which is a form of inflation. The amount of interest you’re charged and the amount you repay towards your student loan is based on your income.

How and when do I repay my student loan?

If you’re course is full time you’ll be due to start repaying your loan the April after you finish or leave your course. If you’re studying part time you’ll be due to start repaying the April four years after the start of your course, or the April after you finish or leave your course, whichever comes first.

How you’ll repay depends on your circumstances once you’ve left your course.

  • If you’re employed – you don’t need to do anything
    Your employer will automatically take repayments from your salary along with your tax and National Insurance. They’ll only take repayments if you’re earning over the current repayment threshold of £21,000 a year, £1,750 a month or £404 a week. Remember, you might still make a repayment if your annual salary isn’t over £21,000 but you do overtime or get a bonus that puts you over the weekly or monthly threshold. If this happens you can ask for a refund at the end of tax year.

  • If you’re self employed – you’ll fill in a self assessment tax return
    If your income is over the current repayment threshold of £21,000 you’ll make student loan repayments straight to HM Revenue & Customs.

  • If you’re going on to further study or you’re earning less than the repayment threshold - you won’t have to make any repayments until your income is over the repayment threshold.

How much will I repay?

The amount you pay is based on your income, not what you borrowed. You’ll repay 9% of your income over the current repayment threshold of £21,000 a year, £1,750 a month or £404 a week.

This table gives some examples of what your repayments might be:

Do I have to repay my loan if I go overseas?

Maybe, it depends on your income. If you’re leaving the UK for more than three months, even if it’s temporary, you have to let us know.

Because of differences in living costs, the repayment threshold in another country might be different from the UK. But, you’ll still repay 9% of your income above the repayment threshold for the country you’re living in.

What happens if I don’t keep in touch?

If you don’t keep your details up to date you could be charged more interest than you should be.

Or, if you go overseas and don’t keep your account details up to date you may also be charged a fixed repayment amount. This could be higher than the amount you’re due to pay based on your income. You may also be asked to repay your full loan, including interest and penalties, in one lump sum.

For more information about interest and repaying your student loan go to our repayment quick start guide