UK Student Loan Repayment 2026: Plans 1, 2, 4, 5 and Postgraduate Explained

Most UK graduates have no real idea how much of their salary disappears into student loan repayments each month, or when, if ever, the loan will actually be repaid in full. That is partly because a student loan behaves less like a normal debt and more like an extra rate of income tax, it is based entirely on how much you earn, not on a fixed schedule designed to clear the balance. Our student loan repayment calculator works out your exact monthly and annual figure across every plan in seconds, and this guide explains the rules behind those numbers.

Which plan am I on

Your repayment plan depends mainly on where you studied and when your course started, not on how much you borrowed or what you studied. Plan 1 generally applies to English and Welsh undergraduates who started their course before September 2012, and to most Northern Irish undergraduates regardless of start date. Plan 2 covers English and Welsh undergraduates who started between September 2012 and August 2023. Plan 5 is the newest, covering English undergraduates who started from September 2023 onwards, replacing Plan 2 for new starters. Plan 4 applies to Scottish students, regardless of when they started. If you took out a separate loan for a master's or doctoral course, that is repaid under the Postgraduate Loan rules, on top of whichever undergraduate plan also applies to you.

If you are not sure which plan applies to you, the most reliable way to check is your online account with the Student Loans Company, since it confirms your exact plan type and current balance rather than leaving you to work it out from general rules of thumb. This matters because each plan has a different threshold and, in Plan 2's case, a different interest structure, so getting it wrong can throw off any repayment planning you do.

Thresholds and repayment rates

Every plan works the same basic way: you repay a fixed percentage of your income above an annual threshold, and nothing at all below it. The threshold and rate just differ by plan.

If you have both an undergraduate loan and a Postgraduate Loan, you repay both at the same time, deducted separately against each threshold. Thresholds are usually reviewed each tax year, so always check GOV.UK if you are reading this some time after publication, rather than assuming these figures are still current. Our take-home pay calculator includes student loan deductions alongside Income Tax and National Insurance, so you can see your full net pay in one place.

A worked example

Say a graduate earns £35,000 a year. Here is what they would repay annually and monthly under each plan, assuming they only had that one loan.

Notice how the same £35,000 salary produces a noticeably different monthly deduction depending on the plan, purely because of the different thresholds. This is a common source of confusion for graduates comparing notes with friends who studied at a different time or in a different nation, since two people on identical salaries can have genuinely different take-home pay because of their plan alone. Try our student loan repayment calculator with your own salary and plan for an exact figure, including a side-by-side comparison across all plans.

How interest works

Interest starts accruing on your student loan from the day you first borrow, including while you are still studying, and it continues for as long as any balance remains outstanding. The exact rate depends on your plan and, for some plans, your income while you are repaying, and it is linked to the Retail Prices Index measure of inflation rather than being a fixed percentage set once and left alone. Because it moves with RPI and, on some plans, your earnings, the current rate can change more than once a year, so check your online account with the Student Loans Company or GOV.UK for the figure that applies to you right now rather than relying on a number that may already be out of date.

The practical effect is that your outstanding balance can keep growing even while you are making repayments every month, if the interest added is larger than the amount you are repaying. This is completely normal and by design for many graduates, particularly early in their career on a lower salary, and it does not mean something has gone wrong. It is one reason the loan is written off after a set number of years regardless of the remaining balance, covered next.

When your loan is written off

Every student loan plan has a fixed write-off period, generally counted from the April you first became due to start repaying, not from when you took the loan out. Plan 1 loans are typically written off after 25 years, Plan 2 and Plan 4 after 30 years, and Plan 5 after 40 years, while a standalone Postgraduate Loan is usually written off in line with whichever undergraduate plan it sits alongside. These periods are set by government policy and can change, so treat them as a general guide and confirm your own write-off date through your Student Loans Company account.

Whatever remains outstanding at that point, even if it is the full original amount plus years of accumulated interest, is simply cancelled. Nothing is owed by you, your estate, or anyone else after that date, and a student loan is also written off automatically if the borrower dies or becomes permanently unable to work due to disability. For a huge number of graduates on Plan 2 or Plan 5, particularly those who never earn a very high salary, the loan is written off with a substantial balance still outstanding, which is worth bearing in mind before assuming you need to clear it entirely.

Should you overpay your student loan

This depends heavily on your plan, your income trajectory, and what else you would do with the money instead. If projections suggest you are likely to be written off with a large balance remaining, for example a Plan 2 graduate on a modest salary for most of their career, voluntary overpayments are effectively money you would otherwise never have had to repay at all. In that situation, many financial advisers would suggest directing spare cash towards a pension or a stocks and shares ISA instead, where it can benefit from long-term growth. Our compound interest guide explains why starting early with savings or investments can matter more than the rate you earn.

On the other hand, if you are a high earner, especially on Plan 1 where the write-off period is shorter, or you expect a large windfall like an inheritance, overpaying can make sense, since you are likely to clear the balance in full eventually regardless, and paying it off sooner reduces the total interest charged over time. There is no single right answer here, it depends entirely on your own numbers, so it is worth modelling your likely lifetime earnings before committing to voluntary extra payments that cannot usually be refunded once made.

Does a student loan affect a mortgage application

A student loan is not treated as a debt in the way a credit card, personal loan or car finance agreement is, and it does not appear on your credit file or affect your credit score. Mortgage lenders will not decline you simply for having one. However, your monthly student loan repayment does reduce your net take-home pay, and most mortgage lenders include this deduction when working out how much you can realistically afford to borrow, alongside your other regular outgoings. Our take-home pay calculator shows your net income after student loan deductions, which gives a more realistic starting point than your gross salary when thinking about affordability.

If you are planning ahead for a mortgage application, our UK Income Tax 2026/27 guide explains how your wider pay is taxed, and our student budget calculator can help younger graduates still finding their feet see exactly where their money goes each month.

Common mistakes to avoid

One frequent mistake is treating a student loan like a normal debt to be cleared as fast as possible, without first checking whether it is realistically going to be written off before you would ever repay it in full. For many graduates, overpaying simply hands over money that would otherwise have been cancelled at no cost to them.

Another common error is not checking your plan type after moving between the UK nations, for example a Scottish graduate who later works in England, or assuming your plan changed when you changed job, when in fact your plan is fixed by where and when you started your course, not where you currently live or work.

Finally, some graduates panic about the size of their outstanding balance shown online, without realising that the balance itself rarely matters for day-to-day budgeting, what matters is your monthly repayment amount, based on your income, and whether you are likely to clear the balance before it is written off. Our student loan repayment calculator focuses on exactly that monthly figure, so you can budget with a realistic number rather than being alarmed by the total balance alone.

Frequently asked questions