If the income threshold for your loan is ?27,295 and you earn ?28,295 during the year, you pay 9% on the extra ?1,000, i.e. ?90. You pay this in monthly instalments, so that ?90 becomes 12 monthly repayments of ?7.50.
The table below shows what your monthly repayments could look like. Because the money is usually taken before you get paid (i.e. weekly or monthly), the actual amount could vary during those months when you earn a bit more or a bit less.
Monthly Student Loan repayments in Scotland
Bear in mind that these are just guideline figures. There’s more info, including full UK figures, in our Student Loan repayments cheat sheet.
Any Student Loan you haven’t paid back after 30ish years gets written off. Any remaining balance is erased and monthly repayments stop.
When exactly your loan is wiped out depends on which part of the UK funds your studies, but it’s typically either when you turn 65 or 30 years after you graduate whichever happens first.
The biggest consequence of loan cancellation is that in combination with flexible repayments many students won’t pay back the whole loan.
While this sounds fabulous, predicting whether you’ll get it written off or be stung for the full amount (plus interest) isn’t an exact science:
- For an idea when you might start repaying your Student Loan, check the average starting salary for your degree.
- To check your chances of repaying the whole amount, plug your expected starting salary into our Student Loan repayment calculator.
Student Loan small print
Remember: it doesn’t matter how much you borrow, or what happens to interest rates. The only thing that affects the size of your monthly repayments is how much you earn after uni.
The Student Loan charges interest
Just like any other loan, the Student Loan adds interest to your balance. The interest rate is tied to how the economy performs and can go up or down. The figures are usually updated every September, but currently:
- For students from Scotland and NI, interest is 1.5%.
- For students from England and Wales, interest varies between 1.5% 4.5%* depending on whether you’re still studying or how much you earn (if you’ve left uni). Interest defaults to 4.5%* if you don’t keep your details up-to-date.
Added interest means you’ll end up owing more money than you originally borrowed and could take longer to repay. While that may sting a little, keep in mind that whether interest goes up or down makes no difference to your monthly repayments.
However, it’s worth noting that added interest could impact how long you make repayments for, including whether you repay it all before the loan is written off.
Although only higher earners have a realistic chance of repaying the loan in full, even for them a high interest rate would mean extra debt which then takes longer to clear.
‘Income’ includes more than salary
You’re probably used to thinking of income as wages from a job, but it includes other sources of taxable income, including bar or restaurant tips and some state benefits. It’s worth keeping an eye on these, as they could nudge you over the salary threshold when you’re not expecting it, or bump up your payment amount during some months.
A Student Loan WON’T affect your credit rating
Your credit score is a really valuable number that determines whether you get the best deals on credit cards, loans, energy bills and even mobile phone contracts. Thankfully, owing money on a Student Loan won’t affect your credit score.