Student Loan Interest Calculator

Interest on student loans accrues from the day the loan is paid out, including while you are still studying. For Plan 2 loans, the rate is linked to RPI (Retail Prices Index) plus a margin of up to 3% depending on income. While studying, you are charged RPI + 3%, subject to an overall 6% ceiling. After graduation, the rate scales from RPI at an income of £29,385 or below to RPI + 3% at £52,885 or above, with a sliding margin in between. With RPI at 4.1% from 1 September 2026, that scale runs from 4.1% to the capped 6%.

For Plan 5 loans, started from 2023/24, interest is capped at RPI only, with no additional income-based margin, which puts it at 4.1% from 1 September 2026 after RPI fell back from its 11% peaks. Plan 1 loans, taken before 2012, use the lower of RPI or the Bank of England base rate plus 1%, which lands at the same 4.1% this year. Plan 4, the Scottish plan, is capped the same way as Plan 1. Postgraduate loans charge RPI + 3% for all earners regardless of income, which the 6% ceiling currently holds at 6%.

This calculator shows the interest accruing on your balance each month and year, based on your current balance, plan type and income, and how much of your monthly repayment goes to interest rather than reducing the principal. On Plan 2 with a £45,000 balance, a £35,000 salary and RPI at 4.1%, the rate lands at roughly 4.55%, giving annual interest of about £2,049 on £45,000. The repayment is (£35,000 − £29,385) × 9% ÷ 12 = £42.11 a month, or £505.35 a year, so the balance grows by around £1,544 a year.

The debt you graduate with is considerably bigger than the money you received. A £40,000 loan accrues roughly £1,640 in its first year on Plan 5 and up to £2,400 on Plan 2 for a high earner, and after a 4-year course the starting balance including accrued interest is typically £55,000-£75,000. For many graduates the monthly repayment never covers the interest, so the balance keeps climbing until it is written off.

Repayment thresholds vary widely by plan and are what actually determine the monthly deduction. Plan 1 takes 9% above £26,900, Plan 2 takes 9% above £29,385, Plan 4 in Scotland takes 9% above £33,795 and Plan 5 takes 9% above £25,000. A Postgraduate Loan takes 6% above £21,000 on top of any undergraduate deduction, so someone holding a Plan 2 loan and a postgraduate loan pays both at once and can lose 15% of income above the shared threshold.

A lower interest rate does not always mean a smaller bill. Consider a £45k career earner with a £50k starting loan. On Plan 2 the deduction is around £1,405 a year, roughly £117 a month, and with the 30-year write-off the total repaid comes to about £60-£80k. On Plan 5, the lower £25k threshold makes the deduction £1,800 a year from the start and the 40-year term keeps it running a decade longer, so the total is nearer £90-£120k. New starters are not automatically better off than Plan 2 borrowers.

Voluntary repayment therefore rarely pays on Plan 2, because most borrowers never clear the balance and the loan is written off after 30 years, so an overpayment is a gift to the government. Plan 5 is a different case, since the longer 40-year term and the lower rate make full repayment more likely. High earners above £60k on Plan 5 can save real interest by repaying early. The breakeven test is whether your estimated total repayments plus interest exceed the original loan plus the voluntary lump sum.