How does student loan repayment actually work in the UK?

Very differently from a commercial loan — the amount you repay each month depends on your income, not on how much you borrowed, which changes almost every intuition people bring to it.

The mechanics:

You repay a percentage of income above a threshold, not a fixed instalment. Below the threshold you repay nothing, and this applies indefinitely — periods of low income, career breaks or unemployment simply produce no payments.

It is collected through PAYE alongside income tax, automatically. Self-employed people pay through self assessment.

The balance is written off after a set period from the point repayments were due, regardless of how much remains.

Interest accrues, typically linked to inflation and sometimes to income. For many borrowers the interest rate is largely notional, because it affects the written-off balance rather than what they actually pay.

Different plans have different thresholds, rates and write-off periods — which plan you are on depends on when and where you started, and the differences are substantial. Postgraduate loans are a separate plan and repaid concurrently.

The implications people get wrong:

It does not appear on your credit file as a conventional debt and does not directly affect credit scores. Mortgage lenders do see the deduction on payslips and account for it as a reduction in disposable income.

The headline balance is frequently irrelevant. A large proportion of borrowers will never repay in full, so the balance functions as a cap rather than a target.

Voluntary overpayment benefits only those who would otherwise repay in full — which is a minority, and concentrated among high earners. For everyone else, overpaying means paying money that would have been written off.

Moving abroad does not cancel it; there is an overseas repayment regime with its own thresholds and a requirement to notify.

This is general information about how the system works, not personal financial advice.