Most of the money is gone and the month has scarcely begun.
Your salary comes in on payday and before you can even blink, most of it has vanished.
For many households, 71% of their take-home pay disappears into debt repayments — credit cards, personal loans, store accounts and car finance, among others — making it feel less like income and more like a brief stopover.
With the remaining 29% of your take-home pay, you must still buy groceries, pay school fees and transport, among other things.
You can’t manage what you don’t measure. You need a clear picture of how much you owe, who you owe, and what it costs you. That visibility is the first step to taking control of your debt
— Tando Ngibe, senior manager at Budget Insurance
Sounds familiar?
You are not alone, as the latest DebtBusters’ 2025 Q4 Debt Index, released earlier this month to coincide with National Debt Awareness Month, shows that South Africans are faced with a high debt-service burden.
“Consumers are spending 71% of their take-home pay to service debt before entering debt counselling,” says Benay Sager, executive head of DebtBusters. “This is the highest figure since 2017. Those taking home more than R35,000 a month use 85% of their income to repay debt and have a record debt-to-income ratio of 210%.
“[There is] increased financial stress with age. The average age of new debt-counselling applicants has increased to 40 during the past few years. The proportion of applicants who are 45 or older has increased from 20% in 2016 to 31% in 2025.
“[There are] unsustainably high levels of unsecured debt, especially among top earners,” says Sager.
“Unsecured debt for those earning more than R35,000 a month is 75% higher than in 2016, vastly outpacing inflation and net-income growth.”
Tando Ngibe, senior manager at Budget Insurance, says, “there is a pressing need to educate and support consumers in understanding their financial obligations”.
“Greater awareness of how debt affects their financial wellbeing is essential,” says Ngibe.
“Furthermore, the car finance and insurance industry has a critical role to play in protecting and empowering customers. By promoting responsible lending, offering guidance and assisting with debt restructuring solutions, the industry can help consumers regain control of their financial health.”
Ngibe says restructuring debt “provides breathing room, such as lower instalments, better cash flow and protection from falling behind or damaging your credit record”.
“You can’t manage what you don’t measure. You need a clear picture of how much you owe, who you owe and what it costs you. That visibility is the first step to taking control of your debt,” says Ngibe.
Ngibe helps us understand debt better:
Sowetan: Is there anything like good debt and/or bad debt? Please explain.
Ngibe: Good debt builds long‑term value — like a home loan, education loan or business loan. Bad debt is high‑interest and short‑term, like store accounts and credit cards that are used for non‑essential spending.
Sowetan: What is the difference between good and/or bad debt?
Ngibe: The difference between the two is impact; good debt works for you by building assets or income. Bad debt works against you by draining your cash flow.
Sowetan: How would one know if they have good or bad debt?
Ngibe: The question you have to ask is, does this debt build value? Are the interest and repayment manageable? And will it improve my future? If not, it’s likely bad debt.
Sowetan: When is the right time to restructure debt?
Ngibe: If you’re using one credit facility to pay another or you can tell that you will no longer be able to meet your financial obligations, the very first step is to seek advice from a qualified financial professional — someone who can assess your personal situation objectively and advise on whether a restructure is the most appropriate option for you.
Sowetan: What steps should people take to restructure their debt and how often should one review it?
Ngibe: Start by speaking to a professional for guidance; make a list of all your debts, prioritise the high‑interest ones, discuss options with your creditors and create a realistic budget.
Sager says successive interest rate cuts have provided relief. However, “vehicle and unsecured debt continue to exert significant pressure on finances”.
“Although the average interest rate for unsecured debt is somewhat lower, at 21.9%, it remains stubbornly high. Debt counselling is the best way to restructure this debt, reducing unsecured rates to 2.6% per annum and negotiating vehicle debt to more manageable levels.
“The benefits are considerable,” says Sager.
“Not just for the people who completed debt counselling — a cohort that’s almost 12 times larger than in 2016. In 2025, our clients repaid R5.3bn to creditors, allowing this money to flow back into the economy.”
