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%. After graduation, the rate scales from RPI (income ≤ £29,385) to RPI + 3% (income ≥ £49,130).

For Plan 5 loans (started from 2023/24), interest is capped at RPI only, with no additional income-based margin. This means Plan 5 borrowers pay lower interest than Plan 2 borrowers at the same income level.

This calculator shows the interest accruing on your balance each month and year, based on your current balance, plan type and income. It also shows how much of your monthly repayment goes to interest versus reducing the principal. For many graduates, repayments do not cover the interest, and the balance grows until it is written off.

UK student loan interest 2026. Plan 5 (post-September 2023 starters): RPI only, no plus — currently ~3.0% (RPI dropped from 11% peaks). Plan 2 (2012-2022 starters): RPI + up to 3% (variable by income — RPI only for low earners, RPI + 3% for high earners). Plan 1 (pre-2012): RPI capped at lower of RPI or BoE base + 1% (typically 6-7% 2026). Plan 4 (Scottish): same as Plan 1 (RPI capped). Postgraduate Loan: RPI + 3% all earners.

Interest while studying. Plan 2: RPI + 3% throughout study period (highest possible rate). Plan 5: RPI only. £40,000 student loan accumulates ~£1,200 (Plan 5) to £4,800 (Plan 2 high-earner) of interest in first year alone. After graduation: interest tied to income for Plan 2; flat RPI for Plan 5. Starting balance after 4-year course typically £55,000-£75,000 including accrued interest.

Should you repay early? Generally NO for Plan 2 (most borrowers won't repay in full anyway — loan written off after 30 years). Voluntary repayment just gifts money to government. Plan 5: more likely to repay in full (longer 40-year term + lower interest rate = higher chance of full repayment). High earners £60k+ Plan 5: early repayment can save total interest. Calculate breakeven: if estimated total repayments + interest > original loan + voluntary lump sum, repaying early saves money.

Plan 5 vs Plan 2 — total repayment comparison. Sample £45k career earner, £50k starting loan. Plan 2: ~£900/month repayments above £27,295 threshold = ~£2,000/year repayment. 30-year write-off: repay ~£60-£80k total. Plan 5: 9% above £25k = £1,800/year initially. 40-year period: repay ~£90-£120k total over career — pay MORE under Plan 5 despite lower interest. New starters: Plan 5 NOT necessarily better than Plan 2.

Repayment thresholds and rates. Plan 1 (pre-2012): 9% above £24,990. Plan 2 (2012-2022): 9% above £27,295. Plan 4 (Scotland): 9% above £31,395. Plan 5 (post-Sep 2023): 9% above £25,000. Postgraduate Loan: 6% above £21,000 (in addition to undergrad). Sample multiple loans: undergrad Plan 2 + Postgrad = 9% above £27,295 + 6% above £21,000 simultaneously. Combined repayment can be 15% of income above shared threshold.