Student Loans Company
Student loans and how theyre 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?
Its important to understand these differences, so you know what to expect when it comes to repaying your student loan.
To make things easier, weve 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 its important you understand which plan type youre on so you can better manage your repayments.
Find out which plan type youre 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 youre not working or your income is below the threshold, you wont make any repayments.
Check the current repayment thresholds
3.You need to keep your contact and bank details up to date even after you finish studying
After youve finished your course, well still be in touch, so its important that you keep your contact details up to date. Otherwise, youll miss out on important information about your student loan repayments.
You should also keep your bank details up to date in your online repayment account in case youve repaid more than you owe and are due a refund. Its important you check we have the correct information for you so we can process your refund quickly when you contact us.
Update your contact or bank details in your online account
4.You can make voluntary repayments but consider your circumstances carefully
Youre free to make additional repayments towards your loan at any time. This is optional and before doing this, its important to think about your personal and financial circumstances and how these might change in the future. Dont make voluntary repayments if you do not expect to fully repay your outstanding balance by the end of the loan term. If youre not sure about making a voluntary repayment, you should get professional advice from a financial advisor SLC cant give financial advice. Remember, any voluntary repayments you make cant 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 youre repaying the correct amount towards your student loan. Its quick and easy to update us before you leave.
Let us know if youre leaving the UK
6.Your student loan doesnt 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 youve never repaid, your student loan balance will be written off after a period of time. Depending on the repayment plan youre 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 youre close to fully repaying to avoid over-repaying
When youre within the final 2 years of loan repayment, you should take the opportunity to switch your repayments to Direct Debit so you dont pay back more than you owe through your salary.