Student loans and how they’re repaid works differently from other
types of borrowing. For example, did you know you will only repay
when your income is over a certain amount? Or that if you have an
outstanding balance at the end of your loan term it will be
written off?
It’s important to understand these differences, so you know what
to expect when it comes to repaying your student loan.
To make things easier, we’ve put together a list of 8 things you
might not know about your student loan, but definitely should.
1. There are different rules for repaying based on when and where
you took out your loan
The type of loan you have will depend on when and where you
started studying. This is known as your plan type. Each plan type
has a different set of rules for repaying so it’s important you
understand which plan type you’re on so you can better manage
your repayments.
Find out which plan type
you’re on
2. Your repayments are based on your income, not how much you
borrowed
Unlike other borrowing, what you repay depends on your income and
not how much you owe. You repay 9% of your income above the
repayment threshold for your plan type. If you’re not working or
your income is below the threshold, you won’t make any
repayments.
Check the current
repayment thresholds
After you’ve finished your course, we’ll still be in touch, so
it’s important that you keep your contact details up to date.
Otherwise, you’ll miss out on important information about your
student loan repayments.
Update your contact
details on your online account
4. You can make voluntary repayments… but consider your
circumstances carefully
You’re free to make additional repayments towards your loan at
any time. This is optional and before doing this, it’s important
to think about your personal and financial circumstances and how
these might change in the future. Don’t make voluntary repayments
if you do not expect to fully repay your outstanding balance by
the end of the loan term. If you’re not sure about making a
voluntary repayment, you should get professional advice from a
financial advisor – SLC can’t give financial advice. Remember,
any voluntary repayments you make can’t be refunded.
Find out how you can make
extra repayments
5. Going abroad for more than 3 months? Let us know before you go
If you are leaving the UK for more than 3 months, you need to let
us know so that we can continue to make sure you’re repaying the
correct amount towards your student loan. It’s quick and easy to
update us before you leave.
Let us know if you’re
leaving the UK
6. Your student loan doesn’t have any impact on your credit
rating
Student loans are different from other types of borrowing because
they do not appear on your credit file and your credit rating is
not affected. However, if you apply for a mortgage, lenders may
consider if you have a student loan when deciding how much you
can borrow.
7. Your loan will eventually get written off
Even if you’ve never repaid, your student loan balance will be
written off after a period of time. Depending on the repayment
plan you’re on, this will either be 25 years after you become
eligible to repay, 30 years, or once you turn 65.
Find out when your loan
will be written off
8. You should switch to Direct Debit when you’re close to fully
repaying to avoid over-repaying
When you’re within the final 2 years of loan repayment, you
should take the opportunity to switch your repayments to Direct
Debit so you don’t pay back more than you owe through your
salary.
Learn more about switching
to Direct Debit
