Calculate your monthly student loan repayments based on your salary and loan plan. See exactly how much comes out of your pay and when you'll clear the debt.
Threshold: £25,000/yr Rate: 9% above threshold Interest: RPI only Write-off: 40 years
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Enter your salary and loan balance to calculate your monthly repayments.
How Student Loan Repayments Work
You repay 9% of everything you earn above the repayment threshold — not 9% of your total salary. If you earn £30,000 on Plan 2, you repay 9% of £30,000 − £27,295 = 9% of £2,705 = £243.45 per year (£20.29/month). Repayments are collected automatically through PAYE, like tax.
The key insight most graduates miss: if your loan isn't repaid by the write-off date, the remainder is cancelled — you never pay it back. For many lower-to-middle earners on Plan 2, paying extra isn't financially beneficial because the loan writes off before they'd finish repaying it anyway.
For most Plan 2 borrowers, voluntary overpayments don't make financial sense. The loan carries interest (RPI + up to 3%), but the key question is whether you'll repay the full balance before write-off. For most average earners, the loan writes off after 30 years with significant balance remaining — so overpaying just means paying more than you would have had to. High earners who will definitely repay the full balance before write-off may benefit from overpaying to reduce interest. Use a detailed repayment calculator to model your specific situation.
Student loan repayments reduce your take-home pay, which reduces your "affordability" calculation for a mortgage. Lenders typically calculate maximum borrowing as 4–4.5× your net income after student loan deductions. However, student loan debt does not appear on your credit file and does not affect your credit score — lenders assess it purely as a monthly outgoing, similar to a car finance payment. The impact varies significantly by lender and your specific salary.