If you’re studying for a Master’s or if you’re in the process of applying, then you’re more than likely to know that the Postgraduate Master’s Loan gives you access to up to £11,222 from the Students Loan Company.
You may also be aware that you don’t have to start repaying the loan until the April following the end of your course. So, for example, if you finished in June 2022, then you would be eligible for repayments from April 2023.
So, you know how much you can borrow and when you would have to start repaying the money, but have you considered how long it will take to do so?
Well, the first thing to know is that you only start to repay your Master’s loan if you’re earning more than £1,750 a month, which is equivalent to £21,000 a year.
In England and Wales, the amount you repay is 6% of everything you earn above that, which is 3% less than on an undergraduate loan. However, in Scotland and Northern Ireland it’s the same at 9%.
If you never earn above the repayment threshold then you won’t have to repay any of the money. It’s also worth noting that the Master’s Loan is cleared after 30 years, regardless of how much or how little you’ve paid back.
How much will I pay back each month?
To see how much money might be deducted from your earnings once you do rise above the threshold, then take a look at the table below, which is for England and Wales only.
For someone earning £30,000 a year, they might expect to pay £45 a month, which works out at about £540 a year. On a salary of £40,000, the repayments would roughly double to £95 a month or £1,140 a year.
Repayments – England and Wales only
|Annual salary||Annual repayment||Monthly repayment||Weekly repayment|
How long will it take me to repay a Postgraduate’s Master’s Loan?
The Postgraduate Master’s Loan is much smaller than most undergraduate student loans and therefore you are more likely to repay it before the debt is wiped.
For example, if you borrowed £10,000 and earned a starting salary of £25,000 that rises each year by more than inflation, then you would clear the loan within 18 years.
Obviously, if you borrow less than £10,000 or earn more than the amount highlighted above then you could repay it sooner.
What about my undergraduate student loan?
You will be expected to repay your undergraduate and postgraduate loans at the same time.
It’s worth noting that repayments on undergraduate loans do vary. The amount you repay depends largely on when you started your undergraduate degree. If it was after 2012 you will pay 9% on everything you earn over £25,725 for your undergrad loan, plus 6% of everything above £21,000 for your postgrad loan. This means you are essentially paying 15% in total, which works out at approximately £925 a month for those earning over £30,000.
In England and Wales, the undergraduate and postgraduate loan payments are taken separately whereas in Scotland and Northern Ireland you pay once towards a combined balance.
For more information on the Postgraduate Master’s Loan read our blog focusing on some of the key FAQs.
 Estimates figures calculated by finadamasters.com
 Figures calculated by MoneySavingExpert
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