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    Student loan basics

    How UK student loans work — they behave very differently from normal debt.

    By the Happy Wallets team·Updated June 2026·4 min read

    The key idea

    You only repay once your income is above a threshold, and repayments are taken as a percentage of income above it, like a payroll deduction. Any remaining balance is written off after a set period.

    What this means

    • Repayments scale with income, not the balance.
    • If you earn under the threshold, you pay nothing that period.
    • Interest applies, but the write-off date caps the real cost for many.

    Frequently asked questions

    Should I overpay my student loan?+
    Often not, because repayments are income-based and the balance can be written off. Check the current thresholds before deciding.
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