Repaying your student loan

3. What you repay

You pay back 9% of your income over the minimum amount of:

  • £17,775 for Plan 1
  • £21,000 for Plan 2

Interest starts being added to your loan from when you get your first payment. How much you pay depends on which plan you’re on.

Plan 1

Your income per year Monthly repayments
£17,775 and under £0
£20,000 £16
£25,000 £54
£30,000 £91
£50,000 £241

Interest on Plan 1

You currently pay interest of 1.25% on Plan 1. You can find interest rates for previous years.

Plan 2

Your income per year Monthly repayments
£21,000 and under £0
£25,000 £30
£30,000 £67
£50,000 £217

Interest on Plan 2

While you’re studying, interest is inflation plus 3%.

Once you’ve left your course, your interest rate depends on your income in the previous tax year.

If you’re self-employed, your income is the total income amount on your Self-Assessment form.

If you’re an employee, your income is your taxable pay:

  • plus any pension contributions
  • minus any benefits you get from your employer that are taxed through payroll (ask your employer if you’re not sure)

If you have more than one job in a year, your interest rate will be based on your combined income from all your jobs.

Income Interest rate
£21,000 or less Inflation
£21,000 to £41,000 Inflation plus up to 3%
Over £41,000 Inflation plus 3%

The Student Loans Company has more information on how they calculate interest.

If you have Plan 1 and Plan 2 loans

You still pay back 9% of your income over £17,775 a year.

If you earn between £17,775 and £21,000, your payments only go towards your Plan 1 loan.

If you earn over £21,000, your 9% payments go towards both your loans.

If you have 2 or more jobs

Your employers will deduct repayments from your salary - but only for the jobs where you earn over the minimum amount.

HMRC may send you a tax return to make a self assessment of the repayments you owe for the whole year. You’ll need to pay 9% of all your income over the threshold - but any repayments you’ve already made from your salary will be deducted from this.

Keep all your payslips and P60 - you’ll need them if you claim a refund.

If you’re an employee and you do a tax return

If you earn over the minimum amount, your employer will deduct loan repayments from your salary.

Check your payslips or P60 to see how much of your loan you’ve paid off during the tax year. You’ll need to include this information when you fill in your tax return.

The tax year runs from 6 April to 5 April the following year.

You might end up paying your loan back sooner if your income from savings and investments is over £2,000 a year.