If you’re looking to go to university and take out a student loan to cover your course and living costs, you might be worried or confused about how student loan repayments work. We’re here to answer all your questions.
Which plan am I on?
When and how much student loan you repay will depend on your repayment plan. If you started or are planning to start your undergraduate course on or after September 2023 then you are on plan 5. If that’s not you, then you can see which plan you’re on on the gov.uk website.
LLE loan repayments
If you're studying under the Lifelong Learning Entitlement (LLE) rather than a standard undergraduate loan, the same Plan 5 rules apply.
You must start repaying once you've left your course and earn more than the repayment threshold, currently £25,000 a year, £2,083 a month or £480 a week before tax.
Your repayments depend on what you earn over the threshold, not the total amount borrowed. For most people this is deducted automatically alongside Income Tax and National Insurance.
Repayments continue unless:
- You have repaid your loan
- Your salary drops below the threshold
- A 40-year period has passed and the loan is cancelled
If you already have an undergraduate loan and are using your remaining LLE entitlement to fund further study, you'll still make a single repayment of 9% of your gross salary above the threshold, not separate repayments for each loan.
How much will I repay?
Plan 5 means that you won’t repay your student loan until you earn £25,000 a year (before tax), which is:
- £480 a week (before tax)
- £2,083 a month (before tax)
Once you earn that much, you’ll start repaying 9% of your earnings above the threshold. Confusing? We know, let’s break that down with an example:
You earn: £30,000 a year
Amount above the £25,000 threshold: £5,000
9% of £5,000 = £450
You repay: £450 a year or £37.50 a month
If you want to, you can choose to make extra repayments online.
When will I repay?
You will start repaying your student loan the April after you leave your course if you have a job and earn above £25,000 a year.
If you’re unemployed or earn £25,000 or below, then you won’t repay anything.
Your repayments automatically stop if:
- You stop working
- Your income drops to £25,000 or below
On a Plan 5 student loan, you will repay your loan for 40 years from the April after your course ends. For example, if you are 21 the April after your course ends, you will be 61 when your loan repayments stop.
How do I repay?
Your student loan repayments will automatically leave your bank account once you meet the repayment requirements, so you don’t have to worry about remembering to make a payment each month.
Will I be in debt?
Student loan is a debt but it’s not the traditional debt that affects your credit score. So, in simple terms, having student debt won’t affect your ability to have a mortgage or take out any loans.
Interest is added to your student loan. For plan 5 student loans in the UK, the current interest rate is 4.1% (tied directly to the Retail Prices Index rate of inflation for the period of 1 September 2026 to 31 August 2027).