Payday loans are meant to be a short-term solution: take out a small loan to deal with a one-off problem, then pay it off when your next salary arrives. According to the latest DebtBusters Debt Index, a growing number of South Africans are using them like a treadmill rather than a bridge.
What the data reveals for the third quarter of 2026
DebtBusters’ third quarter 2026 Debt Index shows that 64% of people seeking debt counselling had a payday loan, the highest share on record, compared with 57% a year earlier. Nearly all of them (96%) also had a personal loan. On average, applicants are now managing 8.8 credit agreements, the most since the index began.
Non-bank lenders such as retailers, microlenders and online lenders now account for 15% of these applicants’ debt, nearly double the 8% recorded two years earlier. Banks still hold most of it, although their share has fallen from a peak of 75% to 65%.
It is important to note that this data only covers people who have already applied for debt counselling, not every borrower. Even so, it clearly shows how people end up in debt.
The maths behind a one-month loan
Here is what the headline statistics do not spell out. A payday loan only works if next month is going to be better than this month. For the applicants in this index, that is rarely true.
Nearly two-thirds of their take-home pay already goes on debt repayments, leaving roughly 35% to live on for groceries, transport, electricity and everything else. Since 2021, electricity tariffs have risen by 101% and petrol by 46%, while average take-home pay has grown by only 31%. For people earning between R10,000 and R20,000 a month, groceries alone take up 38% of disposable income.
When a payday loan is repaid in one lump sum, it simply pushes the shortfall back by 30 days, with interest and fees added. The gap is still there the following month, only bigger. That is how one loan becomes two, and two become eight.
Seen this way, the record number of payday loans is not really a story about payday lending at all. It reflects budgets that no longer balance, with short-term borrowing filling the hole.
This is not just a low-income problem
The report also challenges the idea that debt stress only affects people on low incomes. Applicants taking home more than R50,000 a month are spending 97% of their net income on debt repayments, and their total debt is roughly three times their annual take-home pay. Their unsecured debt has risen by 67% since 2021, while their incomes have grown by just 12%.
Debt is also reaching across generations. Under-25s now make up 9% of new applicants, three times their share in 2024, while people aged 45 and older account for 29%.
Why this matters right now
These figures arrive just before Black Friday and the festive season, followed by the long wait for January pay. This is when the temptation to borrow quickly is at its strongest.
If you are considering payday loans, first ask yourself one question: where will the money to repay it come from next month? If the honest answer is “another loan”, it will not fix the problem. Start by reworking your budget, talking to your existing lenders about revised repayments, or speaking to a registered debt counsellor. Our Online Loan Education guide explains how payday loans compare with other types of credit, and Credit Wisdom covers the common traps to avoid.
There is a silver lining. Around 15 times as many people completed debt counselling and received clearance certificates this quarter as in the same quarter a decade ago, and they paid creditors roughly R613 million along the way. Seeking help early makes a difference.
Sources: DebtBusters Q3 2026 Debt Index; IOL, 10 November 2026. Photo by Sincerely Media on Unsplash.