There is an old saying that the more you earn, the more you spend. DebtBusters’ latest Debt Index suggests that, for some South Africans, it also seems to mean taking on more debt.
The Q2 2026 Debt Index shows that South Africans – and top earners in particular – remain under intense financial strain. Among consumers who applied for debt counselling in the second quarter, those with take-home pay of more than R50 000 needed 103% of their income to meet debt repayments and had a total debt-to-annual-net-income ratio of 307%.
DebtBusters introduced the R50 000+ income band in the first quarter of 2026 as part of an expanded dataset and revised its historical baseline for most indicators to 2021.
Since then, the debt-service ratio for this group has moved from 101% to 103%.
For the 103% figure, the calculation refers to the proportion of monthly take-home pay required to meet debt repayments. In other words, for every R100 of monthly income, the debt repayments amount to R103.
The 307% figure measures total debt exposure against annual net income. For every R100 earned in a year, consumers in this group have R307 in total debt. The ratio is the highest among the income groups. DebtBusters says the high ratio is primarily attributable to assets, although the impact of large personal loans is becoming more apparent.
The figures put the highest-income group at the top of both measures in the Q2 2026 Index. They also show a different pattern from lower-income consumers, whose total debt has declined by as much as 23% since 2021.
Top earners: more income, but a growing debt burden
The second-quarter figures show that total debt among consumers earning more than R50 000 a month is 82% higher than in 2021. Across all income groups, total debt is 24% higher than in 2021, although the average total debt level is similar to that recorded in 2016.
The increase among top earners is being driven in part by unsecured borrowing.
Unsecured debt is 27% higher overall than in 2021, while among consumers earning more than R50 000 a month it is 84% higher. This compares with cumulative CPI growth of 29% and salary growth of 7% for the top-earner group.
Unsecured debt refers to borrowing that is not secured against a specific asset, including personal loans, credit cards, overdrafts, and retail or store accounts.
Larger unsecured loans are going to fewer consumers
Since 2016, the average unsecured loan size has increased by 66%, while the number of new unsecured loans has declined by 20%.
Benay Sager, executive head of DebtBusters, says the trend means larger unsecured loans are being granted to a smaller group of consumers.
“Over the past decade, the average unsecured loan size has increased, while the volume has decreased. This means larger unsecured loans are being granted to fewer consumers, concentrating credit risk within an ever-smaller group.”
The Q2 Index also shows that lending to lower-income groups has contracted significantly since 2021.
Multiple credit agreements point to continued repayment pressure
The average number of credit agreements held by a new applicant has reached 8.7, the highest level since the Debt Index began in 2016.
Ninety-six percent of new applicants have a personal loan at the time they apply for debt counselling, while 63% have a one-month loan, also referred to as a payday loan. A further 78% regularly rely on credit cards.
The Index notes that the prevalence of personal loans, one-month loans, and credit cards indicate continued cash-flow pressure among consumers.
Across all applicants, 64% of take-home pay is required to service debt, down from the 73% peak recorded in Q1 2021.
Lower-income consumers are borrowing less
Total debt among some lower-income groups has declined by as much as 23% since 2021.
DebtBusters attributes this to reduced access to credit rather than improved financial health.
For consumers earning between R10 000 and R20 000 a month, almost a third of disposable income goes towards food, leaving little for insurance, savings, or emergencies.
The cost of some household expenses has also risen faster than overall inflation since 2021. Petrol prices are up 52% and electricity tariffs 101%, compared with cumulative CPI growth of 29%. Average income growth over the period was 23%.
Younger and older consumers are increasingly represented among applicants
The age profile of new applicants has also changed.
Consumers aged 45 and older now account for 28% of new applicants, up from 23% in 2016. Those younger than 25 account for 9%, while the average age of a new applicant is 39.
The fifth annual Money-Stress Tracker recorded a similar pattern among its respondents. Those aged 24 and younger recorded an 18% increase in their composite financial-stress index compared with 2025, the largest increase among the age groups.
The Tracker, which surveyed close to 18 000 DebtBusters website subscribers in May and June, found that 72% of respondents experienced money stress.
Lower interest rates have provided some relief
There has been some movement in the cost of credit.
The average contractual interest rate on unsecured debt among incoming applicants is 19.62% a year, compared with 13.97% for vehicle finance and 10.39% for home loans.
The unsecured rate is slightly higher than in the previous quarter but remains below its peak. DebtBusters notes that the interest rate on unsecured debt has a significant impact on the proportion of take-home pay required to service debt.
The share of home-loan debt among applicants has fallen to 20%, from 30% in Q2 2023. DebtBusters attributes this partly to the impact of interest-rate cuts between Q3 2024 and Q4 2025.
Methodology note: From Q1 2026, DebtBusters expanded its dataset to include credit-bureau and internal data, as well as historical data from the former Consumer Debt Help business. It says this affected consumer debt profiles and creditor classifications, resulting in historical figures being restated and the baseline for most indicators being moved to 2021.
Editor’s Note: The DebtBusters Debt Index is based on consumers who applied for debt counselling and should not be interpreted as representative of South African consumers as a whole. The Money-Stress Tracker surveyed subscribers to the DebtBusters website and measures respondents’ experiences of financial stress; its findings should likewise be read in that context.
