Student Loan Repayment Calculator (Plan 2 & Plan 5)
Calculate monthly student loan repayments and total interest for UK student loans. Covers Plan 2 and Plan 5 rules.
As an Amazon Associate and CJ Affiliate publisher we earn from qualifying purchases. Prices and availability may vary.
Student Loan Guide
How UK Student Loans Work?
UK student loans are income-contingent — you only repay if you earn above the threshold. Plan 2 (2012-2022 starters): repayment threshold: £27,295/year (2026/27). Repayment rate: 9% of income above threshold. Interest rate: RPI + 0-3% (currently 7.3%). Write-off: after 30 years from April after graduation. Plan 5 (2023+ starters): threshold: £25,000/year. Repayment rate: 9% above threshold. Interest rate: RPI only (lower than Plan 2). Write-off: after 40 years. Plan 1 (pre-2012): threshold: £22,015, with a lower repayment threshold reflecting the older, smaller loan balances typical of this cohort.
What do I need to know about Monthly Repayment Calculation?
Monthly repayment = 9% × (annual salary − threshold) / 12. Plan 2, salary £35,000: (£35,000 − £27,295) × 9% / 12 = £7,705 × 0.09 / 12 = £57.79/month. Plan 5, same salary: (£35,000 − £25,000) × 9% / 12 = £75/month. Repayments go to HMRC via PAYE (deducted from payslip automatically for employed) or via self-assessment for self-employed. Zero repayment if salary below threshold — no repayments required, balance increases with interest.
Will You Repay in Full?
The critical question: will you repay the full balance in 30 (Plan 2) or 40 (Plan 5) years? If yes: treat it as a real loan — making overpayments reduces interest. If no (most people): the write-off after 30-40 years means the marginal extra pound you repay saves no money in the long run — because you will not repay in full regardless. Estimate: £50,000 balance at 7.3% interest. At £35,000 starting salary growing at 3%/year: repayments in year 1: £693. Interest in year 1: £3,650. Balance INCREASES in the early years, since interest accrues faster than the modest repayments reduce it — a completely normal pattern for most graduates rather than a sign anything has gone wrong.
What do I need to know about The Graduate Tax Framing?
The most financially rational way to view a UK student loan (Plan 2/5): NOT as a debt to be repaid as quickly as possible. Rather as an additional 9% income tax rate above the threshold. Overpaying voluntary amounts is usually NOT recommended because: if you will not repay in full anyway, overpaying is throwing money away. The loan is written off regardless. Higher-income graduates who will repay in full: overpaying makes financial sense if the interest rate exceeds your savings rate. Test: if you expect to clear the balance well before the 40-year write-off point, treating it as a conventional debt and considering overpayment makes more sense than if you expect it to be written off regardless.