Student Loan Calculator FAQ

Our calculator models your student loan repayments under different scenarios by:

• Using the official repayment thresholds and interest rates for your specific loan plan
• Projecting your future salary based on growth assumptions
• Comparing overpayment strategies against investing the same money
• Simulating both approaches over the same time period to determine which offers better financial outcomes

The UK has multiple student loan plan types:

• Plan 1: For students who started before September 2012 in England and Wales, or from Northern Ireland
• Plan 2: For students who started between September 2012 and July 2023 in England and Wales
• Plan 4: For all Scottish students
• Plan 5: For students who started on or after August 2023 in England
• Postgraduate Loan: For master's and doctoral courses in England and Wales

The calculator takes your specific plan type into account when performing calculations.

You'll only start repaying when your income exceeds the threshold for your loan plan:

• Plan 1: £24,990 per year (£2,082 monthly)
• Plan 2: £27,295 per year (£2,274 monthly)
• Plan 4: £31,395 per year (£2,616 monthly)
• Plan 5: £25,000 per year (£2,083 monthly)
• Postgraduate Loan: £21,000 per year (£1,750 monthly)

The earliest you'll start repaying is the April after you leave your course (except for Plan 5, which starts in April 2026), or the April 4 years after the course started if you're studying part-time.

Your monthly repayment depends on your income above the threshold:

• For Plan 1, 2, 4, and 5: You pay 9% of your income above the threshold
• For Postgraduate Loans: You pay 6% of your income above the threshold

For example, if you're on Plan 2 earning £2,500 per month, you'd pay 9% of the difference between £2,500 and £2,274, which is £20.34 per month.

Our calculator simulates your monthly repayments over time based on your expected salary growth.

Interest rates vary by loan plan and are updated annually in September based on the Retail Price Index (RPI):

• Plan 1 & Plan 4: The lower of RPI or the Bank of England base rate plus 1% (currently 6.25%)
• Plan 2: While studying: RPI plus 3%. After graduation: RPI (for incomes under £27,295) up to RPI plus 3% (for incomes over £49,130)
• Plan 5: RPI (currently around 7.3%)
• Postgraduate Loan: RPI plus 3% (currently around 7.3%)

The calculator uses current interest rates and allows you to model different future interest rate scenarios.

Student loans are automatically written off after:

• Plan 1: 25 years after you were first due to repay, or at age 65 (depending on when you took the loan)
• Plan 2: 30 years after you were first due to repay
• Plan 4: 30 years after you were first due to repay
• Plan 5: 40 years after you were first due to repay
• Postgraduate Loan: 30 years after you were first due to repay

Our calculator factors in these write-off periods when analyzing whether making overpayments is financially beneficial.

It depends on your specific situation. For many graduates, especially those with Plan 2 loans and moderate incomes, investing the money instead of making overpayments can lead to better financial outcomes. Factors to consider include:

• Your loan plan type and its interest rate
• Your current and projected future income
• Whether your loan is likely to be written off
• The potential return on alternative investments
• Your personal financial priorities and risk tolerance

Our calculator helps you make this decision based on your personal circumstances by comparing the financial outcomes of both approaches.

The Alternative Rate represents the annual return you could expect to earn if you invested your money instead of making extra student loan payments. This is typically based on:

• Returns from index fund investments (often 5-7% annually over the long term)
• Interest saved by overpaying on higher-interest debts like mortgages
• Returns from other investment vehicles you might consider

The default value is 5.0%, but you should adjust this based on your personal investment strategy and risk tolerance.

If you have multiple loan plans (excluding Postgraduate Loans), you'll repay 9% of your income over the lowest threshold from your plan types. You'll only make a single repayment each time you get paid.

If you also have a Postgraduate Loan, you'll pay:

• 6% of your income over the Postgraduate Loan threshold (£21,000/year)
• Plus 9% of your income over the threshold for your other plan type(s)

Our calculator can accommodate multiple loan types and calculate your combined repayments accurately.

Salary growth has a significant impact on student loan repayments because:

• Higher income means you'll repay more each month (9% or 6% of income above threshold)
• For Plan 2 loans, higher income also increases your interest rate
• Faster salary growth might mean you repay your loan in full before it's written off

Our calculator allows you to adjust salary growth assumptions in the Advanced Options section to model different career progression scenarios.

The Retail Price Index (RPI) is a measure of inflation that tracks changes in the cost of living in the UK. It affects student loans in several ways:

• RPI determines the base interest rate for all loan plans
• RPI can affect the annual increases in repayment thresholds
• Higher RPI generally means higher interest rates on your loan

You can adjust future RPI projections in our calculator to model different inflation scenarios and their impact on your loan repayments.

The calculator uses the current rules and interest rates for student loans, but future changes to government policy could affect actual outcomes. Our projections include assumptions about:

• Future salary growth
• Inflation rates (RPI)
• Investment returns
• Interest rate changes

You can adjust these assumptions in the Advanced Options section to create different scenarios and test the sensitivity of the results.

Yes, you can request a refund for overpayments in certain situations:

• If your annual income was below the yearly threshold but you made repayments due to monthly fluctuations
• If you made voluntary overpayments and want to reverse your decision
• If repayments were taken incorrectly (e.g., if you were on the wrong plan type)

Contact the Student Loans Company to request refunds for overpayments.

If you move overseas, you'll still need to repay your student loan, but the process changes:

• You must inform the Student Loans Company about your plans
• Your repayment threshold will be adjusted based on the cost of living in your new country
• You'll need to provide evidence of your income and make repayments directly to the SLC rather than through the UK tax system

Our calculator can still help you determine whether making extra repayments while abroad is financially beneficial.