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How do I repay my student loan if I am only taking a salary of £8,060?

There are two types of student loan which work out into slightly different repayment plans. Plan 1 is any student loan taken out 'before' September 2012, and Plan 2 is any student loan taken 'on or after' September 2012.

You have to be earning over a certain amount of income before you are required to repay your loan - this is known as the repayment threshold. The repayment threshold for Plan 1 is £17,335 and for Plan 2 the threshold is £21,000.

If your salary comes to less than your plan’s threshold, but you do have other forms of income (for example dividends); you will need to make repayments through your yearly Self Assessment.

You will payback the student loan at 9% on any amount (which includes dividend income) that exceeds the repayment threshold that was in place when you took your course. This will form part of your Self Assessment tax bill.

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