Paying off your student loan: settlement figures and Direct Debit
Whether you’re clearing the loan with a lump sum or just approaching the end of normal repayments, the last stretch has a couple of traps.
Paying it off in one go
Interest is added to your balance every month, so the balance keeps moving. That’s why you should ask for an exact figure rather than pay the number on your last statement.
Contact the Student Loans Company (SLC) to find out:
- the settlement amount: the total you owe, and
- the settlement date: the date you need to pay by.
You’ll need your customer reference number (CRN) and, if you’re employed, your latest payslip. Once you know the total, you can pay by debit card over the phone, by bank transfer or by cheque.
If you miss the settlement date, contact SLC again, because the amount you owe may have changed.
There’s no penalty for paying some or all of your loan off early. But an overpayment can’t be refunded, so check first that clearing it makes sense. See should I overpay my student loan?
When you’re close to finishing anyway
If your loan is nearly cleared through normal repayments, there’s a risk that you pay too much. When you’ve repaid in full, HMRC tells your employer to stop the deduction, but it can take around four weeks for that to happen, and in the meantime more comes out of your pay.
To avoid this, you can change to Direct Debit for the final year. SLC will contact you in that final year to tell you how to set it up, provided they have your current contact details, so keep them up to date in your online account.
If too much has been taken
SLC will try to contact you or refund you automatically. It appears on your bank statement as “SLC Receipts”. If you’ve overpaid and haven’t heard from them, ask. See how to claim a student loan refund.
After it’s cleared
- Check your payslip to confirm the deduction has stopped.
- Keep your final statement.
- If you had more than one plan, check each one is shown as cleared.
Checking your balance
Your balance and repayment history are in your online account and your annual statement. To see how long your loan would take at your salary, and what an early payment would change, use the calculator.
Source: GOV.UK, Repaying your student loan. Rules can change.