Income based loans
What is an income based loan?
An income based loan is money that you borrowed to help with your studies.
This could have been a Maintenance Loan to help you with your day-to-day costs, or a Tuition Fee Loan paid by us, on your behalf, to your university or college to cover the costs of your tuition fees. You have to pay these loans back.
This type of loan is also known as an income contingent repayment (ICR) loan.
If you received any additional grants or bursaries you do not pay these back.
Can my income based loan be written off?
Yes. There are different rules for loan write-off depending on where you normally lived when you entered university or college and when you took out your first loan.
When your loan will be written off
| Where you normally lived |
First loan taken out in or before academic year 2005/06. |
First loan taken out in or after academic year 2006/07. |
| England, Wales or Northern Ireland |
Loans written off when you reach 65. |
Loans written off 25 years after they became eligible to be repaid. |
| Scotland |
Loans written off when you reach 65. |
Loans written off 35 years after they became eligible to be repaid. |
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Your Loan Balance
How can I find out how much I still owe?
You can login to your student loan repayment account using the login link on this page, and use the Balance Calculator to work out how much you have left to pay.
You will need to have details of:
- all deductions that have been taken from your pay
- any repayments you have made to HM Revenue & Customs through Self Assessment
since we were last advised of your repayments through the tax system.
If you have not logged in to your account before, visit the section about how to use your online account.
What should I do if I think I have paid off my loan since I received my last statement?
You should contact us with details of all the deductions that have been taken from your pay, or that you have paid to HM Revenue & Customs since the date of your last statement.
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Repayment of your loan
How do I repay my income based loan?
Your repayments are normally collected through the tax system by HM Revenue and Customs (HMRC).
This will either be:
- Through the Pay As You Earn (PAYE) scheme if you are the employee of a company.
- Directly to HMRC through Self Assessment.
What is Pay As You Earn (PAYE)?
This is where your employer deducts a student loan repayment directly from your pay slip. For more information, see the section on repaying through PAYE.
What if I pay tax through Self Assessment?
If you are self-employed you will be responsible for calculating and paying your student loan repayments to HM Revenue & Customs. For more information, see the section on repaying through Self Assessment.
How much do I repay?
You will repay 9% of anything you earn over the income threshold.
The UK income threshold is:
- £15,000 gross per year
- £1,250 gross per month
- £288 gross per week
For example, if you earn £1,650 per month, you would pay 9% of £400, or £36 per month to your student loan.
Please see the section on Overseas Thresholds for information about income thresholds in other countries.
Can I make additional repayments?
Yes. You can make additional repayments by credit or debit card at any time, directly to us, by using the Make a Payment service.
For more information about other methods of repayment available, visit the payment options section.
How do I repay if I am living overseas?
If you are employed overseas or are out with the UK tax system you will make student loan repayments directly to us. For more information, see the section on income based loan repayment from overseas.
What should I do if I think I have nearly paid off my loan?
You can login to your student loan repayment account using the login link on this page, and use the Balance Calculator to work out how much you have left to pay.
If you are within a few months of paying your loan off in full, or if you have already paid it off, you should contact us with details of all the repayments you have made since the date of your last statement.
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Interest on your loan
What is the current interest rate?
The interest rate on on Income Based Loans can be found on the Interest Rates page.
Why have I been charged interest?
Interest is applied to student loans from the moment you receive your first payment until your loan is paid off in full.
How and when is the interest rate decided?
The interest rate is set by the Department for Business, Innovation & Skills (BIS) each year. It is normally based on the Retail Price Index each March and takes effect from the September of that year.
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Your loan statement
When are statements issued?
We issue a statement to you shortly after HM Revenue & Customs notify us about any repayments you have made during the previous tax year.
We are normally notified of your repayments once a year, after the end of the tax year. The time of the year that we receive this notification can vary from year to year which means you may not receive a statement from us annually.
Why aren’t they issued more frequently?
We can only issue a statement to you once we receive notification about your repayments from HM Revenue & Customs.
Why does my statement show the wrong amount of repayment?
This usually happens if you have more than one employer in the tax year. Once HM Revenue & Customs send us your updated tax year information, including student loan deductions from any additional employers, we will adjust your balance and send you a new statement.
If you only had one employer during the tax year, please contact us and have your P60 from the relevant tax year to hand.
Why have I received a statement showing an outstanding balance when I have paid my loan off in full?
You should check the period shown on the statement. If you paid your loan off in full after this period it will show on your next statement.
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