For many South Africans, debt is something they worry about every month.
It could be the personal loan taken out to cover an unexpected expense, a credit card used when the grocery money runs short, or a loan needed to repair a car that someone depends on to get to work. For households already under pressure from the cost of living, keeping up with debt repayments can become increasingly difficult.
New figures show just how widespread the problem has become. According to Old Mutual’s 2026 Savings and Investment Monitor, half of working South Africans now say they worry about debt often or always. That is up from 43% two years ago, while the figure rises to 56% among lower-income earners.
At the same time, debt review is becoming more common. Old Mutual found that 14% of working South Africans had applied for debt review or debt counselling in the past year. DebtBusters‘ Q4 2025 Debt Index also found that debt counselling completions are now almost 12 times higher than they were a decade ago, with most applicants holding personal or payday loans.
For people who genuinely cannot afford their debts, debt review can be an important lifeline.
Under South Africa’s National Credit Act, debt review allows a registered debt counsellor to assess a person’s financial position, negotiate restructured repayment terms with creditors and consolidate repayments through a single distribution agent. The process is designed to give over-indebted households breathing room and help prevent them from taking on more debt simply to pay existing debt.
But there is a problem when debt review is presented as the answer to every financial problem.
The report points to growing concerns about consumers being targeted through social media, WhatsApp campaigns and telemarketing calls that promote debt review as a quick way to reduce monthly repayments. The danger is that the focus can fall on the immediate reduction in the monthly payment without explaining what debt review could mean for the consumer over several years.
Once a consumer is under a debt review order, they cannot access new credit until their restructured debts have been settled and a clearance certificate has been issued. That can take several years.
For someone who is genuinely over-indebted, this restriction can be helpful. It prevents the person from simply borrowing more money every time they fall short.
But for someone who did not actually need debt review, being locked out of formal credit can create a completely different problem.
Emergencies do not wait for someone to finish paying off their debt.
A car can break down. A child can need money for an unexpected school expense. A household appliance can stop working. Someone can suddenly need money to deal with an urgent expense.
When access to regulated credit is no longer available, some consumers may turn to informal lenders instead.
Old Mutual’s research shows that borrowing from informal lenders increased from 12% to 19% of working South Africans in a single year. These informal lenders, commonly known as mashonisas or loan sharks, can charge extremely high interest rates. The report notes that some have been known to charge between 30% and 100% a month and use coercive methods, including taking IDs, bank cards or SASSA cards as security.
That is a far more expensive situation for someone who is already struggling with debt.
There is also another side to the problem: getting access to formal credit in the first place is becoming harder.
National Credit Regulator data shows that 65.3% of credit applications were declined in the fourth quarter of 2024, even as the number of applications increased. This means more consumers are finding it difficult to access regulated credit when they need it.
And not all borrowing is necessarily irresponsible.
Old Mutual found that 62% of personal loan holders borrowed money to deal with an unplanned expense. That could mean paying for a child’s school sports tour, repairing a car needed to earn a living or replacing a broken appliance at home.
This is something that is easy to recognise in everyday South African life. Sometimes people borrow because they are spending recklessly. But sometimes they borrow because life happens and there simply is not enough money sitting in the bank to cover the unexpected bill.
Interestingly, many consumers are also trying to deal with their financial problems before they become serious.
About 38% of consumers said they had approached a creditor in the past year to arrange alternative payment terms, up from 32% the previous year. This suggests that some households are willing to speak directly to their creditors when they realise they may struggle with repayments.
For consumers, this is an important reminder that debt review is not necessarily the first or only option.
If you are struggling with your monthly repayments, it may be worth speaking to your credit provider first and finding out whether an alternative payment arrangement is possible. If your debt has become genuinely unmanageable, debt review may provide the structured help you need.
The important thing is to understand the difference.
Debt review can protect households that are genuinely over-indebted. But entering debt review without understanding the long-term consequences can leave a consumer without access to formal credit and potentially more vulnerable to expensive informal lenders.
For South Africans dealing with debt, the goal should not simply be to find the lowest monthly repayment. It should be to find a solution that actually improves their financial position.
In the current environment, where half of working South Africans say they frequently worry about debt, having clear information before making a financial decision matters.
Debt review can be a valuable consumer protection. But it works best when it is used by people who genuinely need it, while consumers who can manage their situation through direct discussions with creditors should have access to those options too.
Ultimately, being financially healthy does not mean never borrowing money or never needing help with debt. It means understanding your options and making sure the solution you choose does not create an even bigger problem later.
