36The DebtBusters third quarter 2026 Debt Index reveals that South Africans earning more than R50 000 a month are using 97% of their net income to repay loans. The report shows a sharp increase in consumers turning to non-bank lenders, with the average applicant now holding 8.8 credit agreements.
Borrowers under severe financial pressure are increasingly relying on short-term debt to cover living expenses. A record 64% of new debt counselling applicants hold a one-month payday loan, while 96% have an active personal loan.
Non-bank lenders, which include microlenders, retailers and online platforms, now account for 15% of the debt held by new applicants. This is the highest proportion recorded in the history of the index and almost double the 8% seen two years ago. Traditional banks hold 65% of the debt, down from a peak of 75% in the third quarter of 2023.
Who is most affected by the debt burden?
The financial strain spans all income brackets, but high earners face the highest debt-to-income ratios. Consumers taking home more than R50 000 a month have total debt equivalent to three times their annual net pay. Since 2021, this group has seen their unsecured debt increase by 67%, while their salaries grew by only 12%.
Middle-income households earning between R10 000 and R50 000 a month have experienced almost zero income growth over the same period. For those taking home between R10 000 and R20 000, groceries consume 38% of their disposable income. Consumers earning less than R10 000 spend half of their money on food.
What are the borrowing costs and demographic shifts?
The cost of servicing unsecured debt is high, with new applicants paying an average contractual interest rate of 19.85% a year. In comparison, vehicle finance carries an average rate of 14.11%, and home loans sit at 10.6%, while the national repo rate is 7.25%.
The demographics of borrowers seeking help are also shifting rapidly:
- Consumers under the age of 25 make up 9% of new applicants, a 50% year-on-year increase.
- Borrowers aged 45 and older account for 29% of applicants, up from 22% a decade ago.
- The debt-to-annual-income ratio for those aged 45 to 54 has reached 159%.
Despite the rising debt levels, more consumers are successfully completing the rehabilitation process. During the third quarter of 2026, 15 times as many people received clearance certificates compared to the same period ten years ago, paying back R613 million to creditors in the process.
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