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What are the rules for student loans in the UK, and which key terms should you know?

By FastBuySale Newsroom · 5 Nov 2026 · 17m ago

Key student loan terms and which plan you are on

Student loans in the UK are repaid based on what you earn, not what you owe. official UK government guidance says how much you repay depends on your income, meaning what you earn including bonuses and overtime, before tax and other deductions. The total you owe, which is what you borrowed plus interest, has no impact on how much you repay each year. You repay 9% of your income above the threshold for your plan if you are on Plan 1, 2, 4 or 5, and 6% above the threshold if you have a Postgraduate Loan.

Your plan depends on where you applied and when you started your course, and you cannot choose it. Current yearly thresholds on official UK government guidance are £26,900 for Plan 1, £29,385 for Plan 2, £33,795 for Plan 4, £25,000 for Plan 5 and £21,000 for a Postgraduate Loan. Repayments start no earlier than the April after you leave your course, stop automatically if your income falls below the threshold, and any balance left is written off after a set period.

Repayment plan: official UK government guidance says when you start repaying and how much you repay depends on your repayment plan. You cannot choose your plan, and if you have more than one loan you could be on different plans. You can check by signing in to your online account.

England (Student Finance England): if you started on or after 1 August 2023, undergraduate courses, PGCEs, Advanced Learner Loans and Lifelong Learning Entitlement finance are on Plan 5. If you started between 1 September 2012 and 31 July 2023, undergraduate courses and PGCEs are on Plan 2. Courses started before 1 September 2012 are on Plan 1. Higher Education Short Course Loans are on Plan 2.

Wales: courses started on or after 1 September 2012 are on Plan 2 for undergraduate courses and PGCEs; before that date you are on Plan 1.

Scotland: if you applied to the Student Awards Agency Scotland, you are on Plan 4 for undergraduate and postgraduate courses.

Northern Ireland: if you applied to Student Finance Northern Ireland, you are on Plan 1 for undergraduate and postgraduate courses.

Postgraduate Loan: master's and doctoral loans from England and Wales are on a separate Postgraduate Loan plan.

Wrong plan? official UK government guidance says download your 'active plan type letter' from your online account and ask your employer which plan they have you on. If it differs, show the letter so payroll can be updated. You can get a refund if you paid back too much because you were on the wrong plan.

Readers evaluating Student loans should separate marketing claims from the actual rule text that governs their account or product. When two summaries disagree, the governing document or statute wins. If a rule depends on your age, filing status, or income band, re-check it when any of those facts change. Life events quietly move people across thresholds they last reviewed years earlier.

Repayment thresholds and how much you pay

Plan 1: £26,900 a year, £2,241 a month or £517 a week.

Plan 2: £29,385 a year, £2,448 a month or £565 a week.

Plan 4: £33,795 a year, £2,816 a month or £649 a week.

Plan 5: £25,000 a year, £2,083 a month or £480 a week.

Postgraduate Loan: £21,000 a year, £1,750 a month or £403 a week.

Worked example from official UK government guidance: on Plan 1 with £33,000 a year (£2,750 a month), you repay 9% of £509 (£2,750 minus £2,241), which is £45 a month. On Plan 4 with £36,000 a year (£3,000 a month), you repay 9% of £184, which is £16 a month. Check your take-home pay with the

More than one plan: without a Postgraduate Loan, you repay 9% of income over the lowest threshold of your plans, as a single repayment each payday. With a Postgraduate Loan as well, you repay 6% over £21,000 plus 9% over the lowest threshold of your other plans.

Two jobs: you only repay from jobs where you are paid over your plan's threshold, not on combined income. If you are self-employed or file Self Assessment, HMRC works out repayments from your whole-year income; see

Bonuses: you make a repayment if your pay goes over the weekly or monthly threshold, for example because of a bonus or overtime. You can ask for a refund at the end of the tax year if your annual income was below the yearly threshold.

A useful habit is to write down your goal, time horizon, and cash buffer before you change any election related to Student loans. Decisions made during a stressful week are the ones people reverse later at a cost. Educational explainers like this one cannot replace personalized advice for complex situations such as divorce orders, inherited accounts, or cross-border tax residency. Escalate those cases to a qualified professional.

Interest on UK student loans

Current rates on official UK government guidance: 4.1% on Plan 1, Plan 4 and Plan 5, and 6% on a Postgraduate Loan.

Plan 2 uses a Variable Interest Rate. While studying, you are usually charged the Retail Price Index (RPI) plus 3%, currently capped at 6%, from the day your first payment is made.

After your course, Plan 2 interest depends on income: 4.1% if you earn £29,385 or less; 4.1% plus up to 1.9% between £29,386 and £52,884; and 6% at £52,885 or more.

Interest keeps building: official UK government guidance says interest is still added to what you owe even if you are not working or your income is below the threshold. Your annual statement, normally available in your online account by the end of August, shows how interest was applied.

Because the rate is linked to RPI, inflation matters; see and the

When you start, stop, and when loans are written off

Start: the earliest you start repaying is the April after you leave your course. Part-time students on courses longer than 4 years that started before 1 January 2027 start in the April 4 years after the course began. Thresholds change on 6 April each year.

Stop: repayments stop automatically if you stop working or your income goes below the threshold.

Paying early: official UK government guidance says there is no penalty for paying some or all of your loan off early. If you are weighing overpayments against other debts, compare costs with the

Credit files: student loans do not appear on credit reports and do not affect your credit score, but lenders may consider them in affordability checks, for example for a mortgage. See

Write-off, Plan 1: 25 years after the April you were first due to repay if your first loan was paid on or after 1 September 2006, or at age 65 if before.

Write-off, Plan 2: 30 years after the April you were first due to repay. Plan 4: 30 years if first paid on or after 1 August 2007; if earlier, at 65 or 30 years, whichever comes first. Plan 5: 40 years. Postgraduate Loans (England and Wales): 30 years.

Cancellation: the Student Loans Company cancels the loan if the borrower dies, and may cancel it if you can no longer work because of illness or disability and claim certain disability benefits.

Overpayments of loan or grant: SLC will write to you, and you must repay these separately from the rest of your loan.

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