UK student loans work differently from almost any other kind of borrowing, and a lot of the advice that applies to normal debt, pay it off as fast as possible, watch out for your credit score, simply doesn't apply here. This guide covers everything beyond the basic repayment calculation: which plan you're actually on, how interest works, when the loan gets written off, and whether overpaying is ever a good idea.
For exactly how much comes off your pay each month, see our take-home pay calculator, which covers the current thresholds and repayment rates in full. To project the whole picture instead, our student loan calculator forecasts what you will owe at graduation and models how long repayment takes, including whether your balance gets written off before you clear it.
Which Plan Am I On?
This trips up more people than almost anything else about student loans, since it depends on where you studied and exactly when your course started, not just what type of course it was.
| Plan | Who it applies to | 2026/27 threshold |
|---|---|---|
| Plan 1 | England or Wales, started before September 2012, or any Northern Ireland student | £26,900 |
| Plan 2 | England or Wales, started between September 2012 and July 2023 | £29,385 |
| Plan 4 | Scotland, any start date under the current system | £33,795 |
| Plan 5 | England, started 1 August 2023 onward | £25,000 |
| Postgraduate | England or Wales Master's/Doctoral loan* | £21,000 |
*Scotland and Northern Ireland don't use this separate threshold. Postgraduate debt combines with undergraduate debt into a single repayment instead, covered in our four-nations comparison.
If you're genuinely unsure, your annual student loan statement or your account on the Student Loans Company website states your plan type directly, and it's worth checking rather than guessing, since the thresholds differ significantly between plans. Our take-home pay calculator and dedicated student loan calculator both support Plan 5 directly, alongside every other plan.
Repayments for Plan 5 never start before April 2026, regardless of when someone actually left their course, which is a rule unique to this plan. Most of the first full Plan 5 cohort, on standard three-year courses that started in September 2023, only began repaying in April 2027. Our full guide to Plan 5 covers exactly who's on it and when repayments start in detail.
How Interest Actually Works
Interest accrues differently depending on your plan, and it matters less than most people assume, for reasons covered in the next section.
| Plan | How the rate is set |
|---|---|
| Plan 1 & 4 | The lower of RPI inflation or the Bank of England base rate plus 1% |
| Plan 2 | A sliding scale from RPI up to RPI plus 3%, based on income, capped at 6% maximum |
| Plan 5 | RPI inflation only, no additional margin |
| Postgraduate | Capped at 6% maximum, similar structure to Plan 2 |
With RPI currently at 4.1% for 2026/27, Plan 1 and 4 borrowers are typically paying a lower rate than Plan 2 borrowers, who can face a real interest rate on top of inflation once their income rises. It sounds like it should matter enormously over a working life, and for a small number of high earners who clear their balance early, it does. For most borrowers, it barely matters at all, which is the genuinely counterintuitive part covered next. For the full rate for every plan and exactly how each one is calculated, see our student loan interest rates guide.
Why Interest Matters Less Than You'd Think
Your monthly repayment is fixed at 9% of income above your threshold (6% for Postgraduate), regardless of how large your outstanding balance is or how fast interest is accruing. A higher interest rate doesn't increase what comes off your payslip, it only affects how long the balance takes to clear, and how much, if anything, remains to be written off at the end.
This is why financial commentators increasingly describe student loans as functioning more like a graduate tax than a conventional loan for a large share of borrowers. The Institute for Fiscal Studies estimates only around a quarter of Plan 2 borrowers are on track to repay their loan in full before it's written off, meaning for the majority, interest is quietly inflating a balance that will ultimately be cancelled rather than genuinely costing them more in monthly terms.
When Does It Get Written Off?
Every UK student loan has a fixed lifespan, after which any remaining balance is cancelled entirely, tax-free.
| Plan | Write-off period |
|---|---|
| Plan 1 | 25 years after the April you were first due to repay |
| Plan 2 | 30 years |
| Plan 4 | 30 years |
| Plan 5 | 40 years |
| Postgraduate | 30 years |
Plan 5's 40-year term is significantly longer than the others, a deliberate design choice from the 2023 reforms, and it means an even larger share of Plan 5 borrowers are expected to have some balance written off rather than repay in full, despite the lower interest rate. For exactly how write-off works, including what happens automatically, what happens if you die or become permanently unable to work, and a worked example of what "written off" actually looks like in numbers, see our full guide on when a student loan gets written off.
Does It Affect My Credit Score?
No, and this is one of the most reassuring things to know if you're not already aware of it. UK student loans aren't reported to credit reference agencies, so your balance and repayment history don't appear on your Experian, Equifax, or TransUnion file, and an outstanding balance has no direct effect on your credit score.
It can still come up indirectly. Mortgage lenders ask about student loan repayments as part of affordability assessments, since the money coming out of your pay each month affects how much you can comfortably borrow, but this is a lending decision based on your income after deductions, not a mark against your credit file.
Worth knowing: If your income drops below your plan's threshold, through unemployment, a career break, parental leave, or reduced hours, repayments stop automatically through payroll. There's no arrears system and nothing to apply for, and repayments simply resume once your income rises back above the threshold.
Is It Worth Overpaying?
For most Plan 2 borrowers, no, and this genuinely reverses the usual advice about debt. Since your monthly repayment is fixed regardless of your outstanding balance, and a large share of Plan 2 borrowers are expected to have some balance written off eventually, voluntarily overpaying often means handing over money that would otherwise have been cancelled for free. Plan 5 works differently: with 56% of borrowers forecast to repay in full against roughly a quarter under Plan 2, banking on write-off is a considerably riskier assumption, so the case for overpaying is worth weighing more carefully. See our Plan 5 guide for the full comparison.
The exception is higher earners who are confident they'll clear the full balance well before the write-off date regardless. For that group, overpaying can reduce the total interest paid over the life of the loan, similar to overpaying any other debt. If you're unsure which category you fall into, projecting your likely repayment trajectory against your plan's write-off period, rather than assuming overpayment is automatically sensible, is worth doing before committing money to it.
One further point worth knowing before deciding either way: voluntary overpayments made directly to the Student Loans Company aren't refundable. If your income or circumstances change later and you'd rather have kept the money, there's no way to reclaim it, which makes the decision worth genuine consideration rather than a quick call.
Ask your employer: If you're planning a career break or reduced hours and want to understand how it affects your student loan repayments specifically, payroll can confirm exactly how deductions are calculated for your circumstances, since it's handled automatically but the mechanics aren't always obvious from a payslip alone.
Stacking: Undergraduate Plus Postgraduate Loans
If you have both an undergraduate loan and a Postgraduate Loan running at the same time, in England and Wales both are deducted concurrently, and they stack on the portion of income above both thresholds. Scotland and Northern Ireland work differently: both combine undergraduate and postgraduate debt into a single repayment instead, at a single threshold, rather than deducting twice. Our guide comparing all four nations covers exactly how each system handles this.
In England or Wales, someone earning £40,000 with a Plan 2 loan and a Postgraduate Loan pays 9% above the £29,385 Plan 2 threshold, £955.35, plus 6% above the £21,000 Postgraduate threshold, £1,140, a combined £2,095.35 a year, or roughly £174.61 a month. It's a meaningful combined deduction, and worth factoring in specifically if you're weighing up whether a Master's is financially worthwhile, since the two loans run independently rather than one replacing the other.