Should I overpay my student loan?
Last reviewed: · Use the calculator to model your own scenario
Start with your likely repayments
Overpaying can reduce interest if it helps you clear the loan, but a lower balance does not necessarily mean a lower lifetime cost. Your plan, future income and time until write-off all affect the result.
Compare the same scenario with and without extra payments. Include the extra payments in the total, then consider whether you may need that money for other purposes. A plan number alone cannot tell you whether overpaying is worthwhile.
Will the extra payment change the outcome?
Start by checking whether the loan is projected to be repaid before its write-off date. Then compare:
- It clears in both scenarios: earlier repayment can reduce interest. Compare the total paid and when each payment leaves your account.
- It is written off in both scenarios: if required deductions remain unchanged, extra payments increase what you pay and reduce the amount written off.
- Only the overpayment scenario clears: compare the full cost of each scenario. Clearing the balance is not, by itself, evidence of a saving.
You can check this using our student loan calculator. Enter your details and look at whether your loan is projected to be cleared or written off.
Three checked overpayment examples
These examples use the same Plan 2 borrower and future assumptions, with different starting balances. Each compares no voluntary payments with an extra £100 a month. Total paid includes both required repayments and every extra payment.
The loan clears in both scenarios
Starting balance: £5,000 in April 2026. Gross salary stays at £60,000 a year.
| Result | No extra payments | Extra £100/month |
|---|---|---|
| Total paid | £5,146 | £5,102 |
| Balance left for write-off | £0 | £0 |
| Outcome | Clears after 23 projected monthly payments | Clears after 16 projected monthly payments |
The extra payments bring repayment forward and modestly reduce the total paid. Check whether that small reduction is worth giving up access to the money.
Load this example in the calculator. Calculate the baseline, turn Comparison Mode on, set the monthly overpayment to £100, then choose Calculate Comparison to see both totals together.
The loan is written off in both scenarios
Starting balance: £100,000 in April 2026. Gross salary stays at £60,000 a year.
| Result | No extra payments | Extra £100/month |
|---|---|---|
| Total paid | £55,107 | £79,107 |
| Balance left for write-off | £105,561 | £72,876 |
| Outcome | Written off at the end of the modelled term | Written off at the end of the modelled term |
Required repayments stay the same. The extra payments cost another £24,000 and reduce the balance left for write-off; they do not reduce what this borrower pays.
Load this example in the calculator. Calculate the baseline, turn Comparison Mode on, set the monthly overpayment to £100, then choose Calculate Comparison to see both totals together.
Only the extra-payment scenario clears
Starting balance: £50,000 in April 2026. Gross salary stays at £60,000 a year.
| Result | No extra payments | Extra £100/month |
|---|---|---|
| Total paid | £55,107 | £62,704 |
| Balance left for write-off | £15,256 | £0 |
| Outcome | Written off at the end of the modelled term | Clears after 191 projected monthly payments |
The extra payments clear the balance, but increase the total paid by about £7,597. A cleared loan is not automatically a cheaper outcome.
Load this example in the calculator. Calculate the baseline, turn Comparison Mode on, set the monthly overpayment to £100, then choose Calculate Comparison to see both totals together.
Inputs and assumptions for all three examples
Checked on . These deliberately simple future assumptions show how the decision works; they do not predict future salaries, inflation or government rules.
- Plan 2, course started in 2012, course length 3 years. A known balance starts in April 2026; no postgraduate loan.
- Gross annual salary £60,000, pension salary sacrifice 0%. Annual salary growth and repayment-threshold growth are both 0%.
- Historical rates switched off. Assumed RPI inflation is 0%; salary inflation is switched off.
- The 2026/27 lower repayment threshold is held at £29,385 and the upper interest band at £52,885 for the whole projection. Required repayments are 9% of income above the lower threshold.
- Income is above the upper band, so the assumed Plan 2 rate is RPI + 3 percentage points: 3% throughout. No manual salary, interest or overpayment overrides, bonuses, other income or tax-return adjustments.
- The model's final repayment year is 2045/46. Cancellation is represented in whole years; ask SLC for your exact cancellation date.
Nominal pounds. Assumed inflation is 0%, so real and nominal amounts coincide. Figures are rounded to the nearest whole pound.
The calculator estimates monthly interest using an effective monthly rate of (1.03)1/12 − 1 and caps each payment at the balance left. These figures were checked with separate amortisation arithmetic. Annual penny rounding can differ slightly; SLC calculates interest daily and adjusts Plan 2 interest using annual income. This is not a settlement quote.
Future interest rates, income, thresholds or a career break can change all three outcomes. Change those assumptions as well as the overpayment before making a decision. Voluntary extra repayments cannot be refunded.
Official sources: GOV.UK repayment rates and thresholds; SLC Plan 2 interest calculation; GOV.UK write-off rules; GOV.UK extra-repayment rules.
Compare different income paths
A forecast needs more than a starting balance and salary. Check your repayment start date, remaining term, future interest and threshold assumptions, and the amount and timing of any extra payments.
Try slower pay growth, a career break and faster pay growth. A result that changes substantially between these scenarios is uncertain. Today's salary is not a promise about future earnings.
Check the interest rate
The published Plan 1 rate is 4.1% as of September 2026. Under the Plan 1 interest rule, the rate is the lower of RPI or the Bank of England base rate plus one percentage point. This current rate is not a fixed rate for the remaining life of your loan.
Other plans have different interest rules. Check our rates and sources and the current GOV.UK figures before relying on a projection.
Compare the use of your money
- What does the comparison show after including every extra payment, rather than only the interest avoided?
- Would paying another debt reduce a higher cost, and are there charges or other terms to consider?
- How much accessible cash would remain for unexpected bills or a period without earnings?
- If comparing with saving or investing, have you allowed for tax, fees, access restrictions and uncertain returns?
Extra payments are not refundable
GOV.UK states that voluntary extra repayments cannot be refunded. This differs from refunds that may be available for certain deductions taken through payroll. Check the official extra-repayment guidance before paying.
How to make voluntary repayments
Extra payments are separate from required income-based repayments. The Student Loans Company offers payment through an online account and other methods listed in its payment instructions.
To clear a loan in full, ask SLC for a settlement amount and payment date. If you hold more than one plan, check how the extra payment will be allocated.
Model your own scenario
Use our student loan repayment calculator to compare repayment and write-off under your chosen assumptions. Treat the result as an estimate and review it when your circumstances or the rules change.