Student Loan Payment: What You Need to Know

Got a student loan and wonder how much you’ll actually pay each month? You’re not alone. In the UK most borrowers face a mix of interest rates, income thresholds, and changing due dates. This guide breaks down the math, shows you where to look for help, and gives you quick tricks to keep the bill low.

How to figure out your monthly payment

First, gather three numbers: your loan balance, the interest rate (or rates, if you have more than one), and your taxable income. The government uses a simple formula – you pay 9% of any income above the repayment threshold, which is £27,295 for most plans in 2025. Multiply the amount over the threshold by 0.09 and you get the yearly payment. Divide by 12 for the monthly figure.

Example: you earn £35,000 and owe £30,000 at 5% interest. Income over the threshold is £35,000 – £27,295 = £7,705. 9% of that is £693.45 per year, or about £57.79 a month. The interest adds a small extra amount, but the government’s cap on interest means it won’t explode overnight.

If you have a Plan 2 loan (post‑1998), the same 9% rule applies but the interest may be higher, based on the Retail Price Index plus a small uplift. Use the online calculator on the Student Loans Company website for precision, or plug the numbers into a spreadsheet.

Ways to lower your student loan costs

1. **Boost your earnings modestly** – A higher salary pushes more income above the threshold, which means a larger payment, but it also speeds up the repayment timeline and reduces total interest.

2. **Make voluntary payments** – Any extra money you put toward the loan reduces the principal, which in turn trims the interest you’ll owe. Even a £20 a month extra can shave years off the term.

3. **Check for repayment holidays** – If you’re on a low‑income apprenticeship or in another qualifying situation, you can apply for a pause. The interest still accrues, so use this sparingly.

4. **Consider a repayment‑focused budgeting method** – Zero‑based budgeting or the 50‑30‑20 rule can free up cash for loan payments without feeling like a sacrifice.

5. **Watch the repayment threshold changes** – The government reviews the threshold each year. When it rises, your payment share drops automatically.

Lastly, keep an eye on your loan statements. Errors happen, and a typo in the balance can mean you’re paying more than necessary. If something looks off, contact the Student Loans Company right away.

Managing a student loan doesn’t have to be a mystery. By knowing the formula, tracking your income, and taking a few proactive steps, you can keep your monthly payment predictable and your total cost as low as possible. Stay on top of the numbers, and you’ll see progress month after month.