Your Guide to Repaying Student Finance: When and How?
Student Finance Repayment Process
Navigating the Student Finance loan repayment process can seem complex, but here are the essential details to understand how and when to start repaying
When to start repaying
Repayment of your Student Finance loan typically begins after graduation and once you reach a certain income threshold, meaning you won’t pay anything until you have a stable income.
Income threshold
The amount you need to repay depends on your earnings. There’s a government-set income threshold, and repayments only start when your income exceeds this limit. As of August 2023, the threshold is set at £25,000.
How Repayments are Calculated
The repayment rate is a fixed percentage of your income that exceeds the threshold. The exact percentage and income threshold may vary, so it’s important to check the current conditions on the government website. Currently, the rate is 9% of the difference between your income and the set threshold. For example: If your income is £28,000/year, the difference between your salary and the threshold is £3,000, meaning you would repay 9% of £3,000, which is £270/year, or approximately £23/month.
Changes in Income
If your income falls below the set threshold, repayments automatically stop. This flexible system ensures you are not financially overstretched.
Managing Repayments
Repayments are typically managed through the tax system, so the owed amounts are automatically deducted from your salary, similar to income tax.
If you haven’t fully repaid the loan after a certain period (which can vary depending on when you started your studies), the remaining debt can be written off.
For more detailed information and updates on the repayment scheme, visit the official gov. website: bit.ly/student-finance-repay
If you also want to benefit from the government’s Student Finance program, you can apply for free here 👇, and an educational consultant will send you the best offers based on your situation.
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