Watching your balance grow despite paying every month is the most demoralising part of a student loan. This calculator shows exactly how much interest is being added, and whether it will ever cost you anything at all.
Loan Summary
Career Scenario
| Year | Loan Balance | Total Repaid |
|---|
How interest is set on each plan
Interest is charged from the day your first payment reaches your university. Each plan uses a different rule, and Plan 2 is the only one where your salary changes the rate you pay.
| Plan | How the rate is set | Current rate |
|---|---|---|
| Plan 1 | Lower of RPI or Bank of England base rate + 1% | 3.2% |
| Plan 2 | RPI at the threshold, sliding to RPI + 3% at £52,885 | 3.2% to 6.2% |
| Plan 4 (Scotland) | Lower of RPI or Bank of England base rate + 1% | 3.2% |
| Plan 5 | RPI only | 3.2% |
| Postgraduate | RPI + 3% | 6.2% |
Rates change on 1 September 2026
Student loan interest is reset each September using the previous March RPI figure, which was 4.1%. A cap also applies to Plan 2 and Postgraduate loans, holding them at 6% rather than the RPI + 3% the formula would otherwise produce.
| Plan | How the rate is set | Rate from 1 Sep 2026 |
|---|---|---|
| Plan 1 | Lower of RPI (4.1%) or base rate + 1% (4.75%) | 4.1% |
| Plan 2 | RPI to RPI + 3%, capped at 6% | 4.1% to 6.0% |
| Plan 4 (Scotland) | Lower of RPI (4.1%) or base rate + 1% (4.75%) | 4.1% |
| Plan 5 | RPI only | 4.1% |
| Postgraduate | RPI + 3%, capped at 6% | 6.0% |
Why interest probably does not matter
Here is the part that surprises people. Your monthly repayment is fixed at 9% (or 6% for postgraduate loans) of income above your threshold. It is not calculated from your balance. So a higher interest rate does not increase your monthly payment by a single penny. It only inflates a number on a statement.
That number only ever becomes real if you would otherwise clear the balance in full before it is written off. For most graduates the loan is wiped after 25, 30 or 40 years with a large balance outstanding, and every pound of interest added along the way costs them precisely nothing. Interest matters enormously to high earners who will clear the debt, and not at all to everyone else.
So when does interest actually cost me?
- You are a high earner who will clear the balance well before the write-off date. Interest is a genuine cost, and overpaying may pay off.
- You are close to clearing the loan near the end of its term. Interest decides whether you finish early or keep paying to the last month.
- You will never clear it. Interest is cosmetic. Ignore the balance entirely and never overpay.
Not sure which of those you are? The should I pay off my student loan early calculator answers exactly that question.
Frequently asked questions
Why is my balance going up when I pay every month?
Because the interest added each month exceeds your repayment. This is completely normal, especially early in a career, and it does not mean you are doing anything wrong. It also does not increase what you pay.
What is RPI?
The Retail Prices Index, a measure of inflation. Student loan interest uses the RPI figure from the previous March, applied from that September.
Can I be charged interest before I graduate?
Yes. Interest accrues from the moment the first instalment is paid out, while you are still studying.
Rates verified against gov.uk. This is an estimate, not financial advice.