Key Inputs & Their Impact
University Start Year & Course Length:
These crucial inputs determine your student loan plan (e.g., Plan 1, Plan 2, Plan 5). Each plan has
different repayment thresholds, interest rate calculations, and loan write-off periods. Accurate
selection
ensures the calculator applies the correct rules for your situation.
Student Loan Debt (£):
For graduates, this is your current outstanding loan balance. For prospective or current students,
this
should be your best estimate of the total amount you will have borrowed (tuition fees + maintenance
loans
+ any interest accrued during study) by the time you graduate. A higher debt generally means more to
repay, though many loans are written off before being fully cleared.
Annual Salary (£):
Enter your gross annual salary (before tax and other deductions). If you haven't graduated yet, this
should be your realistic expected starting salary once you begin working and making repayments
(typically
from the April after you complete your course). This figure directly influences your monthly repayment
amount, as repayments are usually 9% (or 6% for Postgraduate Loans) of your income above the set
threshold
for your plan.
Extra Monthly Payments (£, optional):
These are voluntary additional amounts you choose to pay each month on top of your standard,
income-contingent repayment. Overpaying can help you clear your loan faster and potentially reduce the
total interest paid, but only if you are on track to repay the loan in full before it's written off.
Consider reading our guide on overpayments to see if this strategy is right for
you.
Initial Lump Sum Payment (£, optional):
This is a one-off voluntary payment you might make towards your loan. A lump sum immediately reduces
your
principal balance, which can save a significant amount of interest over time and shorten your
repayment
period, especially if you are likely to repay the loan in full.
Pension Contributions (%, optional):
This refers to your personal contributions to a pension scheme, as a percentage of your salary. The
impact
on student loan repayments depends on the type of pension scheme:
- Salary Sacrifice: Contributions are taken from your gross pay before tax and
National
Insurance. This reduces your 'NICable income' (the income used to calculate student loan
deductions),
thereby lowering your monthly student loan payments.
- Relief at Source / Net Pay: Contributions are typically made from your net pay or
don't reduce NICable income in the same way, so they usually don't directly lower your PAYE student
loan
deductions.
For a detailed explanation, please see our
article on pensions and student
loans.
Advanced Factors (Optional Inputs)
These inputs allow for more personalized projections. Our calculator pre-fills sensible defaults
based
on
your loan plan, but you can adjust them to explore different scenarios.
Monthly Threshold (£):
This is the gross monthly income you can earn before student loan deductions begin. It's pre-filled
based
on your loan plan but can be overridden to see the impact of potential government changes.
Loan Interest Rate (%):
The current annual interest rate applied to your loan. This is pre-filled based on typical rates for
your
plan (e.g., RPI for Plan 5, or RPI + margin for Plan 2). Plan 2 interest rates can also be
income-dependent; our model uses your input as the current effective rate. For Plan 1 & 2 loans, the
calculator may gradually transition this input rate towards a long-term historical average for those
plans
over several years in the simulation to reflect potential future rate changes.
Wage Growth (% per annum):
Your estimated average annual percentage increase in your gross salary over your career. This is a
highly
influential factor. A conservative long-term average (e.g., 2-4% including inflation and promotions)
is
often used for projections.
RPI / Threshold Growth (% per annum):
The estimated average annual rate at which the government might increase student loan repayment
thresholds. This is often linked to inflation (Retail Price Index - RPI). If thresholds rise slower
than
your wages, your repayments increase relative to your income. Government freezes on thresholds mean 0%
growth for those years. A typical long-term RPI assumption might be 2-3%.
Our Calculator's Assumptions & Simplifications
To provide estimates, all calculators must make certain assumptions:
- Continuous Employment: The simulation assumes you are continuously employed and
earning the projected salary (with applied growth) throughout the repayment period. It does not
automatically account for career breaks or periods of unemployment.
- Monthly Calculations: Interest is calculated and repayments are applied on a
monthly
basis. Official systems may compound interest daily, which can lead to very minor differences over
long
periods.
- Income Definition: The calculator primarily uses gross income for determining
repayments, as per standard student loan procedures. The impact of different pension schemes (Salary
Sacrifice vs. others) on the income used for calculation is a key nuance.
- Repayment Start Point:
- For prospective or current students: The simulation models the full statutory repayment term
(e.g., 40 years for Plan 5) starting from when repayments would officially begin (the April
after
graduation), using your estimated debt at graduation and expected starting salary.
- For graduates already repaying: The simulation models the remaining period of your statutory
loan term, starting from your current debt and salary.
- Interest Rate Model (Plan 2): For Plan 2 loans, the calculator uses the "Loan
Interest Rate" you input as your current effective rate. While it may transition this towards a
historical average for long-term projection, it does not dynamically adjust this rate month-by-month
based on simulated changes in your income against the official RPI + 0-3% income tiers.
- UK Taxpayer: Assumes you are a UK taxpayer subject to UK student loan
regulations.
Overseas repayment rules can differ.
- Current Regulations: Calculations are based on current student finance
regulations
for the different loan plans. Future government policy changes to thresholds, interest rates, or
repayment terms are not predicted by the calculator.
Important Disclaimer
This calculator provides estimates only for illustrative purposes. It is not financial advice.
Your actual student loan repayments, total amount paid, and loan trajectory can vary significantly due
to
individual circumstances, actual economic conditions (inflation, wage growth, interest rates), and any
future changes to student loan policies.
Always refer to official information from the Student Loans Company (SLC), GOV.UK, and other relevant
student finance bodies for definitive details about your specific loan. For personalized financial
advice
tailored to your situation, please consult a qualified, independent financial advisor.
You can read our full disclaimer here.