You might not be thinking about how you'll repay your student loan right now, but it's really important to understand exactly what's involved for when the time comes to repay. When you finish your course you need to repay any loans you’ve borrowed – but not until your income is over the current repayment threshold of £21,000 a year, £1,750 a month or £404 a week.
If you’re a full-time student 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.
The amount you repay each month is based on your income, not what you borrow.
You’ll repay 9% of any income you earn over the current repayment threshold of £21,000 a year, £1,750 a month or £404 a week. If your income changes, either rising or falling, your repayment amounts will change to reflect this. If you stop working, your repayments will stop until you start working again and your income is over the threshold.
The example below shows what you might repay each month depending on your income.
You can also make extra voluntary repayments at any time.
Do I have to pay interest?
Yes. Interest is charged on your loan from the day we make the first payment until the loan is repaid. Any loan remaining after 30 years will be written off.
The interest rate is based on the UK Retail Price Index (RPI)* and will vary depending on your circumstances. The interest rate is updated once a year in September using the RPI from March of that year.
|While you're studying up until the April after you finish or leave your course||Retail Price Index (RPI) PLUS 3%|
|From the April after you finish your course||Interest will be based on your income:
£21,000 or less = RPI
Between £21,000 and £41,000 = RPI plus up to 3%, depending on your income
£41,000 and over = RPI plus 3%
*RPI is a measure of UK inflation. It measures changes to the cost of living in the UK.
How do I repay my loan?
If you're employed
Your employer takes repayments directly from your salary in the same way as tax and National Insurance.
If you’re self employed
You'll repay to HMRC directly through self assessment at the same time you pay your tax.
If you move overseas
If you live or work overseas when you finish you course you still need to make repayments. Contact us before you leave the UK so we can make arrangements for you to start repaying.
Find out more about repaying your student loan in our Repayment Quick Start Guides.
Repaying your Postgraduate Loan
For information on repaying a Postgraduate Loan, go to the new dedicated Postgraduate Loan section for more information.