How This Tool Works
📋 Purpose
UK student loans are income-contingent and written off after 25, 30 or 40 years. Overpaying only saves money if you would have cleared the loan before write-off — otherwise it\u2019s paying down debt that would have been cancelled. This simulator models your exact year-by-year balance using SLC thresholds, rates and write-off rules, then tells you clearly whether to overpay.
⚙️ How It Works
- 1Detect your plan from study start year, nation and course level.
- 2Enter outstanding balance from the SLC portal.
- 3Enter current salary and expected growth rate.
- 4Enter years since graduation (write-off clock).
- 5We calculate current interest rate per plan rules.
- 6We simulate annual mandatory repayment (9% or 6% above threshold).
- 7Year-by-year balance evolution until cleared or written off.
- 8Overpay verdict based on clearance vs write-off timing.
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UK Student Loan Simulator — 2026
Which student loan plan are you on, and should you overpay?
UK student loans are income-contingent: you pay a fixed percentage above a salary threshold, and the balance is written off after 25, 30 or 40 years depending on plan. Overpaying only saves money if you would have cleared the loan before write-off — otherwise it’s wasted cash. This simulator uses the current RPI (2.8%) and BoE base rate (4.75%) to model your year-by-year balance.
Step 1 — Detect your plan
Detected: Plan 2 — English/Welsh undergraduates starting Sept 2012 – Aug 2023
Step 2 — Your loan & salary
RPI + up to 3% (income-linked) — 30yr write-off
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Complete Guide: UK Student Loans in 2026
How UK student loan plans work, when to overpay, and how the 2023 Plan 5 reforms change the calculation.
📅 Last updated: May 2026
Quick Tips
Jump-start your understanding with these essential tips
On typical graduate salary trajectories (£27k starting → £50k at 15 years), the loan is written off with a large outstanding balance. Overpaying = wasted money.
The 2023 reforms (lower threshold, 40-year write-off) mean most Plan 5 borrowers WILL repay in full. Overpaying saves interest — compare to ISA/pension returns.
Even if you should overpay, maximise employer pension match first (free money), then ISA/LISA for first home, THEN student loan overpayments.
Log in at studentloanrepayment.co.uk to verify PAYE deductions are reaching your account. HMRC can take 12+ months to transfer; extra delay costs interest.
If applying for a mortgage in 12 months, a £5k lump sum to clear the loan removes a monthly commitment and can increase your borrowing capacity by 4-5×.
Step-by-Step Guide
Follow these steps to get the most from this tool
Set your study start year, nation and course level. The tool picks Plan 1/2/4/5/Postgrad using the official SLC rules.
Log into studentloanrepayment.co.uk (SLC portal) to get your exact outstanding balance, including accrued interest. Don't guess — the number matters.
Use gross annual salary. Salary growth: 3% is a typical long-run UK wage growth assumption. Graduates in finance/tech may assume 5–8% for the first decade.
Write-off is counted from the first April after graduation. If you graduated 2 years ago, you have 23 / 28 / 38 years left depending on plan.
First run with £0 voluntary overpayment to see the default outcome. This tells you whether the loan is cleared or written off.
Re-run with £500 or £1000 annual voluntary overpayments. See if it accelerates clearance or just reduces an eventual write-off (= wasted money).
"Yes" = you clear well before write-off, overpaying saves interest. "Marginal" = you clear near write-off, compare to other returns. "No" = loan will be written off, do not overpay.
Advanced Topics
Deep dives for advanced users
Martin Lewis's standard guidance: "Your student loan is not really a loan, it's a graduate tax." This is accurate for Plan 1/2/4 for most borrowers. For Plan 5 it's less accurate — more borrowers will repay in full. The loan-vs-tax framing is useful for avoiding panic but shouldn't drive overpayment decisions.
Plan 2 uniquely uses income-linked interest (RPI to RPI+3% across a salary band). This means higher earners pay more interest, which is designed as a progressive tax. If you're on Plan 2 and your salary crosses the upper band (~£51k), your interest rate jumps to RPI+3% — worth modelling.
PAYE employees have repayments deducted monthly by payroll. Self-employed pay via Self-Assessment annually in one lump sum — this means a longer period of interest accrual, so SE borrowers pay marginally more interest overall. Plan accordingly.
A graduate starting at 22 on Plan 5 is written off at 62. Most graduates will be repaying the loan across their entire working life (and will still have 3-5 years of repayment during their peak earning years in their 50s). This is materially different from Plan 2 where write-off hits at 52.
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