Student Loan Interest Rates Plan 2
Student loans are one of the best ways to pay for university – but that doesn’t mean they’re perfect. The interest rates on student loans have increased dramatically in recent years, so if you’re still paying them off it’s worth knowing how much you’ll be paying back in total. Read on to find out more about student loan interest rates and how they work…
Plan 2 loans are fixed at 4.5 per cent, which means they will have the same interest rate throughout their life.
Plan 2 loans are fixed at 4.5 per cent, which means they will have the same interest rate throughout their life. This is the same for both Plan 1 and Plan 2 loans.
* Plan It’s also worth remembering that the interest rate you pay is set by the government and doesn’t change depending on factors like your credit rating. It’s designed to cover some of the administration costs of running a system of student finance.1
You only start repaying your student loan when you’re earning over £25,000 a year—and even then you pay 9 per cent of anything above that amount.
You only start repaying your student loan when you’re earning over £25,000 a year—and even then you pay 9 per cent of anything above that amount. The only way to avoid paying the 9 per cent is to pay off your loan early.
Interest will start to accrue on these loans when you get them.
If you’re still studying and earning over £25,000 a year, you’ll also be paying an interest rate of 4.5 per cent (from 6 April 2019) during that time.
If you’re still studying and earning over £25,000 a year, you’ll also be paying an interest rate of 4.5% (from 6 April 2019) during that time. This is reviewed every March and is based on RPI plus 3%.
Please note, however, that you can’t switch between plans. So if you choose plan 2 now but decide later on that it’s not for you – the rest of your loan will remain in plan 1.
Interest begins to accrue on the day your first payment is made until the end of the loan period, so if you don’t repay early the interest can add up quite a lot.
Interest begins to accrue on the day your first payment is made until the end of the loan period, so if you don’t repay early the interest can add up quite a lot. Interest rates are set by government and reviewed every March.
Interest will start to accrue on these loans when you get them. This is how the student loans system works in EnglanFor example, if you took out a loan of £1,000 in July 2017 and repaid it over the next three years, you would pay back just over £1,100 including interest – that’s around £3.50 a month.d
The interest rate for loans taken out from 1 September 2018 will be 6.3% – the highest level since 2006 when rates rose to 6.6%. The government uses a formula based on the Retail Price Index plus 3 per cent to set this rate and it was due to rise by 0.5 per cent in April. This means you’ll have to pay significantly more when you start repaying your loan than you would if you started repaying now.
Interest rates are set by government and reviewed every March – note that these were increased from 6 April 2018 using a formula based on the Retail Price Index plus 3 per cent.
- Interest rates are set by government and reviewed every March.
- Note that these were increased from 6 April 2018 using a formula based on the Retail Price Index plus 3 per cent.
If your Plan 1 loan was taken out in Wales or Scotland, your tuition fees may be lower than £9,250.
If your Plan 1 loan was taken out in Wales or Scotland, your tuition fees may be lower than £9,250. You can check the tuition fee for your course at the Student Loans Company website or at the university website.
The government sets the interest rate for all loans. Interest rates are reviewed each March and take effect in September.
For loans taken out between September 1998 and August 2012 -if you’re a Plan 2 student, your interest rate is 3.3 per cent (if you completed your studies before 1 September 2012) or 4.6 per cent (since then); -if you’re an EU student who took out a loan on or after 1 September 1998, the same rules applyYou’ll be charged interest on your loan from the day you take it out until you repay it in full or finish repaying, whichever comes first. Interest begins to accrue on the day your first payment is made until the end of the loan period, so if you don’t repay early the interest can add up quite a lot. Interest rates are set by government and reviewed every MarchYour Plan 2 loan will be charged interest from when you get your first payment until your loan is paid off or written off..;
Make sure you’re aware of how much your student loan will cost in total with interest before taking it out.
- Student loan interest rates are reviewed every March.
- Be aware that these interest rates can be increased when they’re reviewed, so it’s a good idea to check that they haven’t risen since the date you took out your student loan.
If you’re worried about the cost of your Plan 2 loans, you can find out how much they will cost in total by using our student loan calculator. The interest rate has been set at 4.5 per cent since 2016-17 and is linked to the Retail Price Index (RPI), which means it could rise or fall each year depending on inflation rates.