Understand how changes in SLC interest rates affect your loan balance and total interest paid over time. Compare different rate scenarios to see the real financial impact.
UK student loan interest rates are set each September based on RPI inflation from the previous March, and can change mid-year if capped.
RPI to RPI+3% (income-based after graduation)
4 years in repayment | 26 years until write-off
Higher interest rates typically apply while studying (RPI+3% for Plan 2)
Official 2025/26 rate for Plan 2: 7.3%
Change: -2.3% (-31.5% decrease)
Maximum: 26 years (until loan write-off)
Starting Balance
£45,000
Total Interest Over 10 Years
£46,035
Final Balance
£91,035
Starting Balance
£45,000
Total Interest Over 10 Years
£28,300
Final Balance
£73,300
Additional Interest
£-17,735
-38.5% change
Balance Difference
£-17,735
higher final balance
Average Per Year
£-1,774
extra interest/year
A rate decrease of 2.3% would save £17,735 in interest over 10 years.
| Year | Current Rate Interest | New Rate Interest | Difference | Balance Gap |
|---|---|---|---|---|
| 1 | £3,285 | £2,250 | £-1,035 | £-1,035 |
| 2 | £3,525 | £2,363 | £-1,162 | £-2,197 |
| 3 | £3,782 | £2,481 | £-1,301 | £-3,499 |
| 4 | £4,058 | £2,605 | £-1,454 | £-4,952 |
| 5 | £4,354 | £2,735 | £-1,620 | £-6,572 |
Showing first 5 years of 10-year projection
| Period | Plan 1 | Plan 2 | Plan 4 | Plan 5 | Postgraduate |
|---|---|---|---|---|---|
| Sept 2025 - Aug 2026 | 3.2% | 3.2% - 6.2% | 4.3% | 3.2% | 6.2% |
| Sept 2024 - Aug 2025 | 4.3% | 4.3% - 7.3% | 4.3% | 4.3% | 7.3% |
| Jan - Aug 2024 | 5.5% | 7.6% - 8.0% | 6.25% | 6.25% | 8.0% |
Source: Student Loans Company and GOV.UK. Rates based on RPI inflation and are subject to change during the academic year if caps are applied.
UK student loan interest rates change annually and can significantly impact the total amount borrowers owe over time. Understanding how these changes work and their financial impact is crucial for effective loan management.
Use our suite of calculators to analyze repayment scenarios, compare options, and make informed financial decisions about your student loans.