Student Loan interest

edited 30 November -1 at 1:00AM in Student Money Saving
2 replies 1.5K views
thunderpantzthunderpantz Forumite
2 Posts
edited 30 November -1 at 1:00AM in Student Money Saving
Hi guys, my first post on here.

I have a Plan 1 student loan, and I am wondering how the interest/repayment is calculated.

- I understand interest on the outstanding balance is accrued monthly.
- Money is deducted from my payslip (PAYE) monthly and sent presumably to HMRC...
- HMRC then send that money over to the student loan company after the end of the financial year.

My question is therefore:

Will the interest still be accrued assuming that no repayments have been made until the end of the financial year?

With an annual statement this is quite hard to work out!

Thanks

Replies

  • Ed-1Ed-1 Forumite
    3.4K Posts
    Eighth Anniversary 1,000 Posts Name Dropper
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    Hi guys, my first post on here.

    I have a Plan 1 student loan, and I am wondering how the interest/repayment is calculated.

    - I understand interest on the outstanding balance is accrued monthly.
    - Money is deducted from my payslip (PAYE) monthly and sent presumably to HMRC...
    - HMRC then send that money over to the student loan company after the end of the financial year.

    My question is therefore:

    Will the interest still be accrued assuming that no repayments have been made until the end of the financial year?

    With an annual statement this is quite hard to work out!

    Thanks
    Interest is adjusted when repayment information is credited to your account after the end of the tax year when SLC receive this from HMRC. Interest is then adjusted and reapplied as if the repayments were received in equal instalments on the final day of each calendar month throughout the tax year.
  • Ed - Thanks for clearing that up!
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