Overpaying your student loan

You can pay extra towards your student loan at any time, on top of your usual repayments. There’s no penalty for doing this.

Before you pay extra, check when your loan will be written off. If it’s likely to be written off before you clear it, paying extra may not help you. You also cannot get extra payments back.

How extra payments work

Your usual repayments are based on your income and come out through the tax system. Extra payments are on top of these.

Paying extra does not change your usual repayments:

• if you’re employed, your employer still takes the usual amount from your salary
• if you fill in a Self Assessment tax return, you still pay the amount due on your income for the year
• if you live abroad, you still pay the same monthly amount

You can choose whether an extra payment goes towards your total balance or towards one repayment plan. If you do not choose, the Student Loans Company (SLC) decides.

You cannot get extra payments refunded

SLC does not refund extra payments. The only exception is if you’ve paid off your whole loan and paid more than you owed.

When paying extra may not help you

Your loan is written off after a set number of years, even if you have not paid it all back. The number of years depends on your repayment plan. Read when your loan is written off.

Your loan may be written off before you repay it in full. If so, extra payments reduce a balance that would be cancelled anyway. You would end up paying more in total than you needed to.

Interest is added to your loan even when you’re not working or your income is below the repayment threshold. Your balance can grow even when you’re not repaying.

When paying extra may help you

If you expect to repay your loan in full before it’s written off, paying extra means you’ll clear it sooner. Interest is charged on what you still owe, so a lower balance means less interest is added.

If you’re unsure, GOV.UK suggests you speak to a financial adviser.

Other things to think about first

Student loan repayments are linked to your income, and they stop if your pay falls below the threshold. For this reason, MoneyHelper says you should not put your student loan before paying off an overdraft or credit cards.

Student loans do not go on your credit file. A lender may still ask about your student loan when you apply for a mortgage.

If you studied full-time and are from Wales, you may be able to have £1,500 of your Maintenance Loan written off. GOV.UK explains Welsh partial loan cancellation.

How to pay extra

You’ll need your customer reference number. Payments sent without it will not be added to your loan.

If you live in the UK, you can pay:

• through your online repayment account, by debit card or Direct Debit
• by bank transfer or standing order
• by cheque made out to ‘Student Loans Company Ltd’, with your customer reference number on the back

If you live abroad, you can pay through your online account by international debit card or Direct Debit. You can also pay by international bank transfer.

GOV.UK lists SLC’s bank details and address on its page about how to make extra repayments.

Paying off your loan in full

Contact SLC to get your settlement amount and the date you need to pay it by. Have your customer reference number ready. If you’re employed, have your latest payslip too.

You can pay the settlement amount by debit card over the phone, by bank transfer or by cheque. If you miss the settlement date, contact SLC again because the amount may have changed.

Avoid paying too much near the end

You can avoid paying more than you owe by switching to Direct Debit in the final year of your repayments. If you do pay too much, you can get a refund.