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Student Loan Interest

Does anyone know how the interest is calculated on a student loan? I still paying off mine, Plan 1 (England). The interest is 6.5%. Wondering how long it will be before its paid off. Thanks.

Comments

  • Ed-1
    Ed-1 Posts: 4,002 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Pingu1 said:
    Does anyone know how the interest is calculated on a student loan? I still paying off mine, Plan 1 (England). The interest is 6.5%. Wondering how long it will be before its paid off. Thanks.
    Interest on plan 1 is the March RPI inflation rate but capped at the Bank of England rate +1%. So it's currently 6.25% as the Bank of England rate is 5.25% and the March 2023 RPI rate was 13.5%.
  • Pingu1
    Pingu1 Posts: 147 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    6.25% of what? Is it my salary or the loan amount?
  • Ed-1
    Ed-1 Posts: 4,002 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Pingu1 said:
    6.25% of what? Is it my salary or the loan amount?
    That's the current interest rate on the loan. 6.25% of the loan balance.

    The repayment rate is always 9% of salary above a threshold. The plan 1 income threshold is currently £24,990.
  • Pingu1
    Pingu1 Posts: 147 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    Thanks, I think I can work it out now.
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