Student loan repayments in the UK are based on what you earn, not what you borrowed.
You only repay when your income goes over a threshold, and you repay a percentage of the amount above that threshold. The exact threshold depends on which plan you’re on.
If you’re trying to figure out when repayments actually begin, start here: When Do You Start Repaying Your Student Loan?
Quick answer (in plain English)
- If you earn under your plan’s threshold, you repay £0
- If you earn over the threshold, you repay a percentage of what’s above it
- If you’re employed, repayments are usually taken automatically through your payslip (PAYE)
- If you’re self-employed, repayments are usually handled through Self Assessment
A lot of people worry repayments mean they’ll “never clear it” — but what matters is how long you repay for, not the total balance. If that’s on your mind, read: When Are Student Loans Written Off?
Repayment thresholds by plan
Most people find the monthly threshold easiest to use because it matches payslips.
| Plan | Yearly threshold | Monthly threshold | Weekly threshold |
|---|---|---|---|
| Plan 1 | £26,065 | £2,172 | £501 |
| Plan 2 | £28,470 | £2,372 | £547 |
| Plan 4 | £32,745 | £2,728 | £629 |
| Plan 5 | £25,000 | £2,083 | £480 |
| Postgraduate Loan | £21,000 | £1,750 | £403 |
How repayments are calculated
The calculation is always the same:
- Take your pay for the period (monthly or weekly)
- Subtract your plan’s threshold for that period
- Apply the repayment percentage to what’s left
Repayment rates
- Plans 1, 2, 4 and 5: 9% above the threshold
- Postgraduate Loan: 6% above the threshold
Repayments reduce your balance, but interest is usually added too — which is why two people on the same salary can see very different balances over time. If you want the simple explanation, link to: How Does Student Loan Interest Work?
Examples by plan (so you can sanity-check your payslip)
Plan 1 example
If you earn £2,750/month on Plan 1:
- £2,750 − £2,172 = £578
- 9% of £578 = £52/month (approx.)
Plan 2 example
Plan 2 repayments start above £2,372/month.
If you earn £30,000/year (around £2,500/month):
- £2,500 − £2,372 = £128
- 9% of £128 = £12/month (approx.)
Important note: If you get a bonus or overtime, you might repay in that month even if your annual salary looks close to the threshold.
Plan 4 example
Plan 4 repayments start above £2,728/month.
If you earn £30,000/year (around £2,500/month) you’d usually repay £0 because that’s below the monthly threshold.
Plan 5 example
Plan 5 repayments start above £2,083/month.
If you earn £26,000/year (around £2,167/month):
- £2,167 − £2,083 = £84
- 9% of £84 = £8/month (approx.)
Postgraduate Loan example
Postgraduate repayments are on top of undergraduate repayments.
If you earn £2,400/month with a Postgraduate Loan:
- £2,400 − £1,750 = £650
- 6% of £650 = £39/month (approx.)
If you also have an undergraduate plan, you can repay both at the same time.
What if you’re self-employed?
If you’re self-employed, repayments are usually calculated through Self Assessment using your income across the tax year.
What if you earn below the threshold?
If your pay is below the threshold:
- you repay nothing
- repayments usually stop automatically when your income drops
The 2 biggest “money worries” people have
1) “Will this mess up my mortgage or credit score?”
Most people only start thinking about student loans when they apply for a mortgage. If that’s you, read: Do Student Loans Affect Your Credit Score or Mortgage?
2) “Will I ever finish paying it off?”
Depending on your plan and earnings, you may repay for a set number of years and then any remaining balance can be written off. When Are Student Loans Written Off?
Where this information comes from
Repayment percentages and thresholds are set by the government and administered by the Student Loans Company. You can find official guidance on repayment calculations on GOV.UK.
What to read next
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