The short answer
- You repay 6% of income above £21,000. On £35,000, that is £70 a month.
- You repay it at the same time as any Plan 1, 2 or 5 loan.
- Interest is RPI plus 3%, capped at 6% from September 2026.
- Any balance left after 30 years is written off.
What the Postgraduate Loan is
Master’s Loans and Doctoral Loans are paid to you, not your university, and can be used for fees or living costs. They are not means-tested. Scottish and Northern Irish students have different postgraduate funding, repaid under their own plans.
How repayments work
- Income above the threshold: £35,000 − £21,000£14,000
- Repayment at 6%£840 a year
Repayments start from the April after you finish or leave your course. The £21,000 threshold has stayed the same since the loan began and is frozen for 2026/27.
Repayments by salary
With an undergraduate loan
If you also have an undergraduate loan, you repay both at once. On £40,000 with Plan 2, that is £79.61 a month on Plan 2 and £95 on the Postgraduate Loan: £174.61 in total, or 15% of income above the thresholds.
- On £40,000
- £79.61 a month
- On £40,000
- £174.61 a month
Interest and the 6% cap
Interest is RPI plus 3%, from the day the loan is paid out. With March 2026 RPI at 4.1%, that would be 7.1%, but the government has capped it at 6% for September 2026 to August 2027. It does not depend on your income.
Will you pay it off?
| Starting salary | Total repaid | Outcome |
|---|---|---|
| £25,000 | £33,563 | £5,596 written off after 30 years |
| £35,000 | £20,776 | Cleared after 16 years |
| £45,000 | £17,122 | Cleared after 10 years |
| £60,000 | £15,311 | Cleared after 6 years |
Because the threshold is low, most borrowers with a graduate job repay in full. Lower earners repay for longer and pay more interest.
The 30-year write-off
Any balance is written off 30 years after the April you were first due to repay, or if you die or become permanently unable to work.
Is a Master's worth the loan?
Think about whether the course leads to higher pay or a career that needs it. Repayments of 6% above £21,000 are on top of any undergraduate loan, so the combined deduction can feel large. Compare the course cost with the likely difference in earnings, and check for scholarships, employer sponsorship or part-time options.
Should you pay it off early?
With interest at 6% and most borrowers clearing the loan, overpaying can save interest. On £35,000, an extra £100 a month clears it in 8 years instead of 16 and cuts the total from £20,776 to £15,815.
Which loan to overpay
If you have Plan 2 as well, overpay the Postgraduate Loan first: Plan 2 is more likely to be written off.
How HMRC and the Student Loans Company work together
Your employer works out repayments each pay day from your pay in that period and sends them to HMRC with your tax. HMRC passes the details to the Student Loans Company, which updates your balance. There can be a delay of several weeks before payments show in your online account. At the end of the tax year, your P60 shows the total deducted.
Because repayments are worked out on each pay period, a one-off bonus can trigger a repayment in that month even if your yearly income is below the threshold. If that happens, you can ask for a refund after the tax year ends.
Pensions, salary sacrifice and repayments
Repayments are based on your pay after salary sacrifice, but before other pension contributions. Paying into a pension through salary sacrifice therefore saves 6% in student loan repayments, as well as income tax and National Insurance. Benefits in kind, such as a company car, do not count towards repayments.
Above the threshold, a basic-rate taxpayer keeps about 66p of each extra pound earned, after 20% income tax, 8% National Insurance and 6% in student loan repayments. A higher-rate taxpayer keeps about 52p.
Postgraduate Loan and mortgages
Student loans do not appear on credit files and do not affect your credit score. Mortgage lenders do count the monthly repayment as an outgoing when working out what you can afford. On £35,000 the Postgraduate Loan repayment is £70 a month, which slightly reduces the amount you can borrow. Paying off the loan early just to borrow more is rarely worthwhile, because you lose savings you could have used as a deposit.
Refunds and overpayments
- If your income for the whole tax year was below the threshold but money was taken, you can claim it back.
- If deductions continue after the balance reaches zero, the Student Loans Company refunds the extra automatically or on request.
- Refunds can be claimed for previous tax years, with your P60s as evidence.
Career breaks, illness and death
If you stop working, for parental leave, study or illness, repayments stop when your income falls below the threshold. Interest continues to be added. The loan is cancelled if you become permanently unable to work because of illness or disability, and it is cancelled when you die: it is never passed on to your family.
Checking your balance
Log in to your Student Loans Company online account to see your balance, interest added and payments received. Keep your contact details up to date, and check your payslips show the right plan type. If your employer uses the wrong plan, you could repay too much or too little; tell them and HMRC so they can correct it.
Common mistakes
- Treating the balance like other debt. What you repay depends on your income.
- Using the wrong plan. Check your plan type in your SLC account and on your payslip.
- Forgetting to tell SLC you have moved abroad. This can lead to fixed repayments and higher interest.
- Missing refunds. Check every year that what you paid matches your income.
What counts as income
- Counts: salary, wages, overtime, bonuses and commission, and self-employed profits.
- Counts if over £2,000 a year in total: unearned income such as savings interest, dividends and rent, reported through Self Assessment.
- Does not count: benefits in kind such as a company car, pension income in most cases, and salary given up through salary sacrifice.
If you have two jobs, each employer looks only at its own pay, so you may repay less through PAYE and the rest through Self Assessment.
Thresholds by pay period
| Paid | Threshold |
|---|---|
| Yearly | £21,000 |
| Monthly | £1,750 |
| Weekly | about £403 |
Your employer compares the pay in each period with these figures and takes 6% of anything above them. If your pay is uneven, the monthly amounts can vary a lot even though the yearly total is what matters.
Your first year in numbers
- Interest added this year at 6%£750
- Repaid through your pay£840
When interest is more than your repayments, the balance grows even though you are paying. That is normal for income-contingent loans and does not change what you pay each month, which depends only on your income.
Working it out yourself
- Take your yearly income before tax.
- Subtract the Postgraduate Loan threshold of £21,000.
- Multiply what is left by 6%. That is your yearly repayment.
- Divide by 12 for a monthly figure.
The calculator does this for you, adds any Postgraduate Loan, and projects the balance over the years ahead.
Doctoral Loans
Doctoral Loans support PhD and similar research degrees. They are paid over the length of the course and can be used for fees or living costs. They are added to any Master’s Loan to form one Postgraduate Loan balance, repaid at 6% above £21,000. Students with research council funding cannot usually get a Doctoral Loan as well.
Which loan clears first
The Postgraduate Loan has a low threshold and, on most salaries, is cleared well before a Plan 2 or Plan 5 loan. On £35,000, the example £12,500 Postgraduate Loan clears in 16 years. After that, you only repay your undergraduate loan, and your take-home pay rises by £70 a month.
Employer and other funding
- Some employers pay for job-related Master’s degrees, sometimes through the apprenticeship levy.
- Universities offer scholarships and fee discounts, including for their own graduates.
- Charities and professional bodies fund some courses.
- Part-time study while working can spread the cost.
Any of these can reduce how much you need to borrow, and therefore how long you repay.
When the loan is cleared
PAYE deductions can continue for a few months after the balance reaches zero, because of the delay in sharing data between HMRC and the Student Loans Company. You can switch to Direct Debit near the end to avoid this. Any overpayment is refunded.
Budgeting during your course
Unlike undergraduate funding, the Postgraduate Loan is a single sum paid straight to you, not split into a fee loan and a living cost loan. It is up to you to pay your tuition fees from it and make the rest last.
- Pay your fees first. Check when your university wants the fees and how much it will take in each instalment, and set that money aside as soon as each payment arrives.
- Plan for the gaps. Payments arrive in instalments across the year, so the money has to cover the weeks in between, including the summer dissertation period.
- Count the whole course. On a part-time course the loan is spread over more years, so each year’s payment is smaller.
- Look for other money. University bursaries, departmental funding and part-time work can fill the gap without adding to your loan.