The Plan 1 student loan interest rate has changed. The new rate is 4.9% and applies to all Plan 1 loans taken out after July 1, 2018. The interest rate you’ll be charged depends on how much money you earn each year and when your repayments are due to start.
Student Loan Interest Rates Plan 1
On June 1, 2016, the interest rate for undergraduate students entering repayment on or after July 1, 2018 is completed
If you are an undergraduate student, the interest rate for your Direct Subsidized Loans is 4.45%. Interest accrues from the time you receive your first disbursement of a loan (the day after your school receives it) until you pay off that loan in full.
Effective July 1, 2018, the interest rate for Direct Unsubsidized Loans is 6.00%. Interest accrues from the day any money is borrowed until it’s paid in full
You will be charged interest on your loan from the date you made your first loan payment until your loan is repaid in full or written off.
- You will be charged interest on your loan from the date you made your first loan payment until your loan is repaid in full or written off.
- Interest is calculated using a daily rate that applies to each day of the year, not just one fixed rate for the life of the loan.
- The amount of interest that has been added to a student’s debt and invested in New Zealand Treasury Bonds (NZTBS) is not returned when they repay their loans – instead it goes towards paying off other student loans owned by the government.
Your rate will be the total of the Bank of England base rate plus 2.5%. The current representative APR is 4.9%.
If you choose to repay in monthly instalments, your interest rate will be the total of the Bank of England base rate plus 2.5%. The current representative APR is 4.9%.
Your repayment amount (what you pay each month) will depend on how much money you earn each year and how long it takes to repay your loan in full. Your repayments are calculated as 9% of income over £21,000. In other words, if your income is more than £21k a year, then 9% of that figure is taken off to pay back your loan each month until it is fully repaid (30 years after starting).
You pay back 9% of any income over £21,000 a year. For example, if you earn £30,000, you’ll pay back 9% of £9,000 (£810). If you earn less than £21,000 a year, you won’t make any repayments.
You will be charged interest on your loan from the date you made your first loan payment until your loan is repaid in full or written off. You’ll then make a final repayment of 9% (or more if you earn over £21,000) of any income over £21,000 a year. For example, if you earn £30,000 after tax each year and have nothing left to pay off at the end of that time period because you’ve already been repaying for several years, then this amount will be added on to what you’ve already paid back.
If for some reason we are unable to collect your repayments from HMRC as part of an arrangement under which HMRC collects repayments on our behalf (known as Pay As You Earn), we may ask to collect these amounts directly from you instead.
The loan is written off 30 years after you start making repayments.
The loan is written off 30 years after you start making repayments.
You are charged interest on your loan from the date you made your first loan payment until your loan is repaid in full or written off.
It’s important to keep track of when loan payments are due and how much they’re for.
The payments are due monthly and are taken out of your salary in the same way as tax. They are taken before your take-home pay, meaning that you will be paid less than the amount stated in your contract because some of it has already been paid to Student Finance. If you have an irregular income or separate contracts for part-time work, make sure that these are dealt with separately so that you don’t pay too much or too little money on a particular month’s bill. You should also keep track of when loan payments are due and how much they’re for—this will help ensure that all payments go through smoothly, without errors or delays in paying off student loans repayments.
Closing
It’s important to keep track of when loan payments are due and how much they’re for.