Education Loan Repayment Calculator UK 2025 – Updated Thresholds

The education loan repayment calculator helps UK students estimate monthly repayments based on their income, plan type (1, 2, 4, 5, or Postgraduate), and the 2025/26 repayment thresholds. For most plans, you repay 9% of income above your threshold — or 6% for postgraduate loans.

TL;DR — Quick Summary

• UK education loan repayments are income-based, not debt-based.
• You repay 9% of earnings above your plan threshold.
• Thresholds and interest rates for 2025 remain aligned with 2024/25 rules unless amended by government.
• Repayments stop automatically if income falls below the threshold.
• Any balance is written off after 30 or 40 years, depending on the plan.

Education Loan Repayment Calculator

Use the logic below to calculate your annual and monthly UK education loan repayments based on the rules applied by the Student Loans Company.

Step-by-step calculation logic

1. Identify your student loan plan
2. Apply the correct income threshold
3. Calculate income above the threshold
4. Multiply excess income by 9%
5. Divide by 12 for monthly repayment

Why You Need an Education Loan Repayment Calculator in 2025

Let’s be real — student finance in the UK can feel like alphabet soup: Plan 1, Plan 2, Plan 4, Plan 5… Each plan has different thresholds, interest rates, and repayment rules. That’s where the education loan repayment calculator comes in handy. It gives you a clear, realistic idea of what you’ll actually pay each month — before that first payslip lands.

Whether you studied in England, Scotland, Wales, or Northern Ireland, the calculator adapts to your plan, salary, and repayment date. Think of it as your financial GPS — not to scare you, but to help you plan smarter.

How the UK Student Loan Repayment System Works (2025 Overview)

In 2025/26, the government uses five active student loan repayment plans. Here’s what’s current:

(Source: UK Government, HMRC updates for 2025/26)

Repayments start only after you cross your plan’s threshold. Your employer automatically deducts repayments via PAYE, so there’s no separate bill — but it’s smart to know how much that deduction will be.

How the Education Loan Repayment Calculator Works

A student loan repayment calculator uses three key inputs:

1. Annual income before tax
2. Your repayment plan (1, 2, 4, 5, or Postgraduate)
3. Optional: interest rate, bonuses, or multiple jobs

The calculator then estimates:

• Monthly and yearly repayment amounts
• Total paid over time (if income stays consistent)
• Remaining balance after a certain number of years

It’s not just about numbers — it helps visualize your post‑graduation finances and avoid surprises.

Example: How Repayments Differ by Income

Let’s run through two quick case examples based on 2025 thresholds.

Case 1 — Sam, Plan 2 (England, graduate 2018): earns £32,000 → pays £265/month.

Case 2 — Amira, Plan 4 (Scotland): earns £38,000 → pays just £39/month due to higher threshold.

Case 3 — Jordan, Plan 5 (England, started 2023): will repay from 2026 but can already project £37/month at £30k salary.

How Interest Is Calculated

Interest is where things get confusing, so here’s the simple version:

• Plan 1: Interest = RPI or Bank of England rate + 1% (whichever lower)
• Plan 2: RPI + up to 3% depending on income
• Plan 4: Inflation‑based (RPI only)
• Plan 5: RPI only (no real interest margin)
• Postgraduate: RPI + 3%

Your loan balance grows monthly, but repayments are based on income, not the total owed. After a set period — usually 30 or 40 years — any remaining balance is written off.

How Repayments Are Collected in the UK

• Automatically deducted via PAYE if employed
• Paid through Self Assessment if self-employed
• Adjusted automatically if income changes
• No repayments required below the threshold

You do not choose how much to repay — the calculation is statutory.

Is This Financially Worth It?

Scenario comparison

• Lower earners (below threshold)
  • Pay £0
  • Balance written off eventually
  • Education loan behaves like a graduate tax
• Middle earners (£30k–£45k)
  • Partial repayment
  • Likely never clear balance
  • Early voluntary repayments usually inefficient
• High earners (£60k+)
  • Repay more quickly
  • May clear balance before write-off
  • Overpayments can reduce total interest paid

Key risk: Making voluntary repayments without confirming you’ll repay in full.

Switching Jobs, Self-Employment & Multiple Loans

• Employers apply repayments automatically via payroll
• Self-employed borrowers must budget for repayments through tax returns
• If you hold undergraduate + postgraduate loans, repayments run concurrently
• Changing jobs does not reset your repayment status

Common mistake: forgetting to declare student loan status when starting a new role.

Common Questions About Student Loan Repayments in 2025

❓ When do I start repaying my loan?

You begin repayments the April after graduation — but only if your income exceeds your plan’s threshold.

❓ What if I move abroad?

You still repay, but through international repayment arrangements. You’ll need to report income to the Student Loans Company.

❓ Can I repay early?

Yes, but not always necessary. Early repayment only helps if you’re sure you’ll clear the balance before the write‑off period.

❓ What happens if I lose my job or earn less?

Your repayments automatically pause if income drops below the threshold — no penalties.

❓ What’s the write‑off period?

• Plan 1: 25 years after first due date
• Plan 2 & 5: 30 years
• Plan 4: 30 years
• Postgraduate: 30 years

Understanding Plan 5 — The Big Change for Future Graduates

From April 2026, a new plan (Plan 5) applies to English and Welsh students who started after August 2023. Here’s what’s different:

• Lower threshold (£25,000)
• Longer repayment term (40 years)
• Interest capped at inflation (RPI)

This means repayments start earlier but grow slower — more people will likely repay in full over time.

Example: Emma earns £28,000 in 2026 under Plan 5. She repays 9% of £3,000 (£270 a year / £22.50 per month). Manageable — but over 40 years, it adds up.

Smart Tips to Manage Your Student Loan

• Track your income and tax code — errors can lead to overpayments.
• Keep your Student Loans Company account updated.
• If self‑employed, include loan repayments in your Self‑Assessment tax return.
• Don’t stress if you can’t repay fast — these loans are income‑based, not credit‑scored.
• Re‑check thresholds each April; they often rise with inflation.

Real‑World Example: Two Graduates, Two Outcomes

Aiden (Plan 2, earns £50,000): Pays £1,935/year. After 20 years, he’s repaid around £38,700. His loan is fully cleared before write‑off.

Leah (Plan 5, earns £27,000): Pays just £180/year. Her loan is written off after 40 years — she never overpays, but total repayment is minimal.

Different plans, same principle: income defines the pace, not debt anxiety.

Here’s What This Means for You

Understanding your student loan isn’t about fear — it’s about clarity. With the education loan repayment calculator, you can see exactly how your repayments scale with your salary. It’s not a lifelong burden; it’s a manageable contribution tied to your success.

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People Also Ask (PAA) & FAQs

How much do I repay on a UK education loan in 2025?

You repay 9% of income above your plan’s threshold. For example, a £35,000 salary on Plan 2 results in repayments of about £58 per month. If earnings fall below the threshold, repayments stop automatically.

What is the UK student loan threshold for 2025?

For Plan 2 borrowers, the threshold is £27,295, based on current rules carried forward from 2024/25. Other plans have different thresholds, so repayments depend on when and where you studied.

Is the education loan written off in the UK?

Yes. Most undergraduate loans are written off after 30 or 40 years, depending on the plan. Any remaining balance is cancelled, regardless of the amount outstanding.

Do education loan repayments affect my credit score?

No. UK education loans do not appear on credit files and do not affect credit scores. They only impact take-home pay through payroll deductions.

Can I stop education loan repayments?

Repayments stop automatically if your income falls below the threshold. You cannot opt out while earning above it, but voluntary overpayments are optional.

What happens if I move abroad?

You must report overseas income and make repayments directly to the Student Loans Company. Thresholds are adjusted based on country-specific cost of living.

Do postgraduate loans change my undergraduate repayments?

Yes. Postgraduate loans add an extra 6% repayment, calculated separately. A borrower can repay up to 15% of income above thresholds if both apply.

Last updated: December 2025

Reviewed for accuracy using official UK government student finance data (2025/26).