South Africa's Deepening Debt Crisis: Why More Consumers Are Turning to Debt Counselling
Record numbers of South Africans are seeking help as rising costs squeeze household budgets to breaking point.
If you feel like your salary disappears before the month is over, you are not alone. Millions of South Africans are caught in the same squeeze — and the numbers paint a troubling picture. According to the latest DebtBusters Debt Index, consumers who applied for debt counselling at the end of 2025 needed a staggering 71% of their take-home pay just to keep up with debt repayments. That leaves barely enough for groceries, transport, and school fees.
So what is driving this crisis, and what can ordinary consumers do about it?
The cost of living is running away from us
Over the past decade, the cost of keeping the lights on and getting to work has skyrocketed. Electricity tariffs have jumped by 165%, petrol prices have risen by 74%, and cumulative inflation has added another 49% to everyday expenses. Meanwhile, wages have barely budged. In real terms — once you account for inflation — consumers entering debt counselling in late 2025 were taking home about 47% less than their counterparts did in 2016.
Put simply, your rand buys far less than it did ten years ago, but your salary has not kept up.
Personal loans have become a lifeline — and a trap
With money running short each month, more and more South Africans are turning to personal loans and payday loans to bridge the gap. A record 96% of consumers who applied for debt counselling in the last quarter of 2025 had at least one personal loan. Even more concerning, 59% had a one-month payday loan — the kind of short-term, high-interest borrowing that can quickly spiral out of control.
The average number of open credit agreements per person has also climbed, from around 6.5 a decade ago to 8.7 today. That means more accounts to juggle, more interest to pay, and more chances for something to go wrong.
It is not just lower-income earners who are struggling
You might think that debt problems only affect people on lower salaries, but the data tells a different story. Consumers earning more than R35,000 a month are now using about 85% of their income to service debt. Among top earners, unsecured debt is 75% higher than it was in 2016. Financial stress is also shifting older — the average age of someone applying for debt counselling has risen to 40, and nearly a third of applicants are now 45 or older.
There is some relief on the horizon
It is not all bad news. Interest rate cuts totalling 150 basis points since late 2024 have given consumers with home loans and vehicle finance a bit of breathing room. The two-pot retirement system has also allowed some people to access a portion of their savings in an emergency, providing much-needed cash flow relief.
And debt counselling itself is making a real difference. In 2025, consumers under DebtBusters' programmes alone repaid R5.3 billion to creditors. The number of people successfully completing the debt review process is now almost 12 times higher than it was ten years ago.
Did you know? Debt counselling can reduce your unsecured interest rates from an average of 21.9% down to around 2.6% per annum. That can make the difference between drowning in debt and having a manageable repayment plan.
What can you do if you are struggling?
If your debt repayments are eating up most of your salary, do not wait until things get worse. Over 717,000 South Africans are currently under debt review, and for good reason — it works. Debt counselling is a legal process that restructures your debts into a single, affordable monthly payment while protecting you from legal action by creditors.
The first step is to speak to a registered debt counsellor. They will assess your financial situation, negotiate with your creditors on your behalf, and help you get onto a repayment plan you can actually afford. It is not a quick fix — it typically takes three to five years — but it puts you on a clear path to becoming debt-free.
The cost of living is unlikely to drop anytime soon, and wages are not going to catch up overnight. But that does not mean you have to face the debt crisis alone. Help is available, and the sooner you reach out, the sooner you can start taking back control of your finances.