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The standard repayment process
The student loan becomes due for repayment in the April following the date that the loan account holder completes or leaves their course. The Student Loans Company (of whom Student Finance Wales is a service delivery partner) will advise HM Revenue and Customs (HMRC) (formerly the Inland Revenue) that the loan has become due for repayment. They in turn will instruct the loan account holder’s employer to deduct repayments from their gross income at the rate of 9% of any income earned in excess of £15,000 a year, £1250 per month or £288 per week.
Loan account holders who are in the UK and are self-employed make repayments through their HMRC tax returns.
If an account holder is living overseas and works outside the UK tax system, they will make repayments directly to the Student Loans Company.
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How interest is calculated
The interest rate for new loans is currently 1.5%. Interest is applied to student loans from the moment they are paid until they are repaid in full. The amount you pay back will have broadly the same value as the amount you have borrowed and no profit is made on the loan itself.
This interest rate is based on the annual March retail price index (RPI) or the highest base rate of a number of major banks plus 1%; whichever is lower.
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Voluntary repayments and early settlement
A student loan account holder can pay off their loan more quickly by making voluntary repayments directly to us, whether or not their income is above the repayment threshold. You can also make additional repayments on their behalf, providing they have given the Student Loans Company permission to talk to you about their account. Details on granting this permission are available through the Student Finance Direct home page.
If you do choose to make voluntary repayments, these will be in addition to any repayments collected through the tax system. Any income-related repayments made in this way will not be reduced, but the loan will be cleared more quickly by making extra repayments. Only voluntary repayments of £5 or more will be accepted.
Payment can also be made in full and final settlement of the loan at any time, with no penalties for early repayment. If you would like to fully settle a loan on behalf of a loan account holder, they should contact us to obtain a settlement figure. If you wish to obtain a settlement figure on their behalf, you must first arrange for them to give us permission to talk to you about their account. You should then contact us on 0870 240 6298 to obtain an up to date settlement figure.
Lines are open Monday to Friday, 9a.m. – 5.30 p.m. You can make voluntary or settlement repayments by the following methods:
| CHEQUE or POSTAL ORDER: |
Please write the student reference number (Student Support Number or Customer Reference Number)
on the back of your cheque or postal order and send directly to:
Finance Department, Student Loans Company Ltd., 100 Bothwell Street, Glasgow, G2 7JD |
| DEBIT CARD (Switch, Maestro, Solo, Delta) |
Please telephone a customer adviser on:
0870 240 6298, Mon - Fri 08:00 - 17:30 |
| BANK GIRO CREDIT |
Please telephone a customer advisor and request a paying in book |
| DIRECT DEBIT |
Please telephone a customer advisor on:
0870 240 6298, Mon - Fri 08:00 - 17:30 |
| STANDING ORDER |
Please complete and print the Standing Order Form (28kb) provided here and forward it to your bank |
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Further Information
You can obtain more details about the repayment of student loans in the guide ‘Student Loans: A Guide to Terms and Conditions’, which you can download from our forms and guides page.
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