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Finance and Money Matters

When will I have to repay student loans?

If you are a full-time student, after leaving university you will start to pay back your loan once you are earning over £21,000 a year, at a rate of nine per cent on any income above £21,000. So if you were earning £25,000, you would pay back nine per cent of £4,000, or £30 per month.

If you are a part-time student studying for more than three years you will start your repayments in the April after you’ve finished three years of study, if you earn over £21,000. This applies even if you are still studying. If you study for less than three years you start repaying your loan in the April after your course finishes if you're earning over £21,000.

To find out how much your future repayment would be depending on your salary, why not visit Directgov's calculator and pick a career.

GOV.UK offers more information about student finance.

How will payments be collected?

Payments will normally be taken automatically, via the tax system, once your earnings exceed the required threshold.

What if my income drops back below £21,000?

If you have been paying back the loan but your income then drops below the minimum threshold, for example because you take a career break or become unemployed, payments will be automatically halted. If you later start to earn over £21,000 again, payments will restart.

What if I never earn enough to pay back my loan?

If your loan has not been repaid after 30 years, any outstanding payments will be written off.

How much interest will be charged?

The government’s plans are that interest will be applied at a rate of inflation plus three per cent while you are at university. From the April after you leave university, if you are earning below £21,000, interest will be applied at the rate of inflation. For graduates earning between £21,000 and £41,000, interest will be applied at between inflation and inflation plus three per cent, depending on income. For graduates earning above £41,000, interest will be applied at inflation plus three per cent. Inflation will be calculated using the Retail Price Index (RPI).

Will loan repayments affect my ability to get a mortgage?

The Council of Mortgage Lenders has advised that a student loan is ‘very unlikely’ to have a material impact on an individual’s ability to get a mortgage. The amount of mortgage available may depend on net income.

Will loan repayments affect my ability to take out a loan?

This would be a decision for the loan provider, but Student Finance England will not be sharing student loan information with credit reference agencies.