Student Loan Comparison
Student Loan Plan 1 vs Plan 2 — What's the Difference?
Plan 1 Threshold
£26,900
Plan 2 Threshold
£29,385
Compare how Plan 1 and Plan 2 student loans differ in monthly repayments, total cost and write-off timelines. Enter your salary and loan balance to see a year-by-year simulation of both plans side by side.
Your Details
Enter actual years remaining from your SLC cancellation date, not the original full term. This annual model holds current thresholds and interest rules fixed, adds a full year of interest before each annual repayment and applies your salary growth assumption. Monthly figures are first-year repayment totals divided by 12, including any payoff cap; they are not exact payroll deductions. Future policy, rates and earnings can change. Check your plan and cancellation rules.
Plan 2 costs less overall
You pay £0 less in total
Plan 1
Plan 2
How the Plan 1 vs Plan 2 calculator works
The calculator simulates both student loan plans year by year. It takes your current salary and outstanding balance, applies the correct threshold and repayment rate for each plan, adds annual interest, and shows you how the balance decreases over time. If the balance is not cleared within the remaining years you enter, it shows the projected cancellation balance.
Plan 1 currently has a £26,900 threshold and 4.1% interest. Plan 2 has a £29,385 threshold and income-dependent interest from 4.1% to the current 6% cap. Enter your actual remaining cancellation terms; older Plan 1 loans can be cancelled at age 65. The lower projected total depends on salary growth, balance and cancellation timing.
If a balance remains at cancellation, the projected repayment total depends on income-based deductions and the remaining term. Treat this comparison as scenarios: your assigned plan cannot be changed simply by selecting the lower projected cost. Use the single-plan student loan calculator for your actual plan.
Frequently asked questions
What is the difference between Student Loan Plan 1 and Plan 2?
For 2026/27, Plan 1 has a £26,900 repayment threshold and Plan 2 has a £29,385 threshold. Both repay 9% above the threshold. Current Plan 1 interest is 4.1%; Plan 2 interest varies with income from 4.1% up to the current 6% cap. Plan 1 cancellation depends on when the first loan was paid: 25 years from the April first due to repay, or age 65 for loans first paid before September 2006. Plan 2 cancellation is 30 years from the April first due to repay.
Which student loan plan am I on?
Your funding body, course type and start date determine your plan; you cannot choose it. For typical undergraduate courses funded by Student Finance England, starts from September 2012 to July 2023 use Plan 2 and starts from August 2023 use Plan 5. Student Finance Wales undergraduate starts from September 2012 use Plan 2; earlier England/Wales courses use Plan 1. Northern Ireland funding uses Plan 1 and Scottish funding uses Plan 4. Check your SLC account for your actual plan.
Should I pay off my student loan early?
This projection can help compare mandatory repayments with the amount you owe, but cannot establish whether early repayment is worthwhile. Future earnings, policy changes, other debts and savings needs matter. Confirm your balance and cancellation date with SLC before deciding.
Interest rates checked on 14 October 2026: Plan 1, 4 and 5 use 4.1%; Postgraduate uses 6%; Plan 2 uses RPI plus the income-dependent addition, capped at 6%. Projections hold current thresholds and interest rules constant, with annual interest steps; they are scenarios rather than forecasts. Monthly deductions shown are annual averages; payroll rounds student-loan deductions down to whole pounds. Write-off periods run from the April first due to repay, not today. Older Plan 1 and Plan 4 loans have different cancellation rules.