A record 64% of people who applied for debt counselling in the third quarter of 2026 had a payday loan, DebtBusters said. A year earlier, the figure was 57%.
The numbers come from the DebtBusters Debt Index for the third quarter. It also found that 96% of new applicants had a personal loan.
“At 8.8, the average number of credit agreements per applicant is at the highest since the Debt Index began. This indicates the extent of financial pressure consumers are experiencing,” said Benay Sager, executive head of DebtBusters.
The index only covers people who have reached the point of asking for debt counselling. It does not show how all South Africans borrow. It does show how people under heavy money pressure are coping.
More of these people are borrowing outside the banks. Retailers, microlenders and online lenders held 15% of new applicants’ debt in the quarter. Two years earlier, that share was 8%.
DebtBusters said this is the highest share in the history of the index. Banks still hold 65% of the debt, down from a peak of 75% in the third quarter of 2023.
According to DebtBusters, people who can no longer get bank credit, or who need fast cash, are turning to other lenders.
The debt is also costly. The average interest rate on unsecured debt among new applicants was 19.85% a year. For vehicle finance it was 14.11%, and for home loans it was 10.6%.
Across all applicants, debt repayments take nearly two thirds of take-home pay, the index found. That leaves only 35% of income for everything else.
DebtBusters said electricity tariffs have risen by 101% since 2021, while petrol prices are up 46%. Over the same time, average take-home pay among new applicants rose by 31%.
Income for applicants earning between R10,000 and R20,000 a month has barely grown. For this group, groceries take 38% of disposable income. People taking home less than R10,000 spend half of it on groceries.
Applicants earning more than R50,000 a month are in the hardest position when it comes to paying debt, the index showed. Their monthly repayments use up 97% of their net income.
Their total debt is three times their yearly take-home pay. It is 44% higher than in 2021, while their salaries grew by just 12%.
Total debt among lower-income applicants fell by as much as 21%. DebtBusters warned this does not mean they are better off. It said it shows they have less access to credit.
Young people are also asking for help more often. People under 25 made up 9% of new applicants, a 50% rise from a year earlier. People aged 45 and older made up 29%, compared with 22% a decade ago.
The average applicant was 39 years old. Debt compared to yearly income reached 159% for those aged 45 to 54.
Sager said the figures are worrying, but more people are taking steps to fix their money problems.
In the quarter, about 15 times as many people finished debt counselling and received clearance certificates as in the same quarter ten years ago. They paid creditors around R613 million while under debt counselling.
Source: this article is based on reporting by IOL. Image: IOL. Written with the help of AI and published by the Tzaneen Voice News desk. See our Editorial Standards.
Kgomotso Maake covers news and politics for Tzaneen Voice. Kgomotso reports on government, Parliament, municipalities, courts, crime and service delivery across South Africa, with a close eye on how national decisions reach towns like Tzaneen and the wider Limpopo province. Stories are written in plain English and focus on the facts: who made the decision, what it means, and what happens next.