The newest Eighty20 & XDS Credit Stress Report (Q3 2025) gives a clear look at how South Africans are managing their debt. The good news is that fewer consumers are falling behind on payments — but many still depend heavily on credit to get through the month.

Full report here: https://mcusercontent.com/35c07374ce844a648ed463095/files/938895fe-5ed2-89ae-d787-2b798de04ca8/Eighty20_XDS_Credit_Stress_Report_2025_Q3.pdf

Below is a simple breakdown of the key findings.

Overall Debt: A Small Increase, But Fewer Overdue Accounts

South Africans owe a total of R2.6 trillion, a small increase of 0.8% from last quarter.

However, overdue debt (late repayments) actually went down:

• Overdue balances dropped by R3 billion

• Personal loans saw the biggest improvement

• Vehicle finance overdue accounts also dropped

This means more people are keeping up with payments, at least for now.

Fewer People Are Falling Behind

Even though there were 900 000 more open credit accounts, the number of loans in arrears went down:

• Loans in arrears dropped to 17.9 million

• Arrears percentage improved from 33.8% to 33.1%

• Loans in good standing grew for the 7th quarter in a row

This suggests households are stabilising their debt behaviour — but it may also be because consumers are prioritising certain debts to avoid losing essential assets (cars, homes, or even access to future credit).

Why Are Defaults Improving? (And Will It Last?)

There are a few reasons why default levels look better right now:

1. Interest rates have stopped rising

While still high, the lack of further increases has helped consumers manage their instalments more predictably.

2. Consumers are prioritising critical debts

People are choosing to pay:

• vehicle finance (to keep transport for work),

• personal loans (to avoid credit score damage), and

• smaller short-term loans first.

This helps reduce overdue accounts in the short term.

3. Lenders are restructuring or extending loan terms

Longer repayment terms — especially on vehicle finance — make instalments smaller.
BUT this only delays the pressure: consumers end up paying for much longer.

4. More people are using credit for survival

A rise in personal loans boosts short-term cash flow, helping people catch up on overdue accounts for a while.
Again — this is not long-term relief.

Possible risks ahead:
If interest rates increase again, or if the economy weakens, these improvements may reverse quickly. Many consumers are operating on very thin margins, especially retirees and middle-income workers.

How Different Income Groups Are Coping

The report breaks consumers into different lifestyle segments. Here’s a simple version:

1. Mass Credit Market (low to lower-middle income)

• More people using credit: 8.6 million

• 2.1 million new loans — mostly small personal loans

• Default rate: 51% (still the highest)

• Overdue balances increasing

People in this group take credit mainly to survive. Even though defaults improved slightly, they remain the most financially vulnerable.

2. Comfortable Retirees

• 1.5 million credit-active retirees

• Strong rise in personal loans (64% of new loans)

• Overdue balances up 15% YoY

Many retirees are borrowing to cover basic living expenses, not assets. Their default levels are currently low, but rising overdue balances are a warning sign — especially with fixed pensions that do not keep up with inflation.

3. Middle Class Workers

• 3.6 million in this group

  

• Strong dependence on personal loans (73% of new loans)

• Balances up 2.2% and overdue accounts up 5.5%

• Default rate improved to 41.5%

Middle-income households are clearly under strain. Their repayments take up 37% of take-home income, making them sensitive to even small financial shocks.

4. Heavy Hitters (higher income)

• 2.2 million active consumers

• 693 000 new loans (+23% YoY)

• Dominate vehicle and home loans

• Home loan balances hit R1 trillion

This group remains the most stable. High-income earners are taking on more credit because they can manage it — but they also carry the highest instalment burden, using 48% of their net income on repayments.
If interest rates rise again, they will feel it first and hardest.

Vehicle Finance: A Warning Sign for the Future

Vehicle finance had its biggest quarter in 5 years:

• 139 000 new loans

• Longer loan terms are increasing (over 90 months), we have seen this in the debt review space, which also has the consequence of vehicles not solving under restructering plans. This remains a concern for the economy and the debt review industry.

Longer terms help make instalments smaller, but:

• Consumers pay more over time

• They remain in debt longer

• Cars may outlast the loan (or break) before the debt is paid

This could cause more defaults in the future if economic pressure increases.

Final Thoughts: Improvement, But Fragile

Q3 2025 looks better on the surface:

• Fewer defaults

• Fewer overdue accounts

• Better repayment behaviour

• Strong credit performance from higher-income groups

But the underlying picture shows ongoing financial strain:

• Heavy reliance on personal loans

• Retirees using credit for daily living

• Longer loan terms masking affordability issues

• Rising overdue balances in key groups

• High instalment-to-income ratios

In simple terms:
South Africans are coping — but just barely.
Any new economic shock (rate hikes, job losses, fuel spikes, load shedding returning) could easily push many households back into default.

Feeling overwhelemed or stressed with your finances, here is a few tips:

Assess Your Financial Situation Early: If debt payments are overwhelming or you’re borrowing to pay off existing loans, act quickly. Obtain a free credit report from agencies like TransUnion or Experian to understand your credit score and debt status. Early intervention prevents deeper financial distress, such as asset repossession.

Seek Registered Debt Counsellors: Work with National Credit Regulator (NCR)-registered debt counsellors who are also registered with an Association. These professionals assess your income, expenses, and debts to determine if you’re over-indebted and eligible for debt review. They negotiate with creditors to lower interest rates and monthly payments, creating an affordable repayment plan.

Understand Debt Counselling Benefits & Disadvantages: Debt review restructures payments to fit your budget, protects assets like homes and cars from repossession, and shields you from legal action by creditors. It consolidates multiple debts into one manageable payment, freeing up cash for essentials. The process also includes financial education to prevent future debt traps. On average, it takes 3-5 years to complete, after which you receive a clearance certificate, allowing you to rebuild your credit score.

Avoid Unregistered Counsellors and Scams: Be cautious of unregistered practitioners or those promising instant debt clearance or upfront payments. Verify a counsellor’s NCR registration and ensure they use approved payment systems like a PDA and ensure you thoroughly check out their reviews before giving out any personal information. Don’t sign anything without receiving proper information on the process.

Adopt Better Financial Habits: Use debt counselling as a chance to learn budgeting and financial management. Avoid new credit during the process, as your credit profile will be flagged, restricting access until completion. Post-review, maintain disciplined spending to rebuild your financial health.

Debt counselling is a proven lifeline, with over 717,495 South Africans currently under review, repaying R1.25 billion monthly. It’s a regulated, effective way to manage debt while protecting your assets and mental well-being. – Look for a debt counsellor here: https://www.dcasa.co.za/debt-counsellor-near-me/ , be Consumer savvy and always research the company.

– 1 December 2025