Personal Loans, Credit Cards and Debt Review: A South African Guide
Personal loans, credit cards, overdrafts and store accounts are forms of unsecured credit that can generally be included in debt review when they become unaffordable. A registered debt counsellor restructures these accounts into one monthly payment, and interest rates may be negotiated down as part of the process. This guide explains how each type of unsecured debt is handled and what consumers should expect.
Key Points
- Unsecured debts can generally be included in debt review.
- Restructuring combines multiple accounts into one payment.
- Interest rates may be negotiated down as part of the process.
- Taking new credit to pay old debt usually deepens the problem.
What is unsecured debt?
Unsecured debt is credit not backed by an asset — personal loans, credit cards, store accounts and overdrafts. Because there is no asset to repossess, these creditors rely on legal recovery processes when accounts default.
When unsecured repayments become unaffordable, debt review can restructure them without requiring new borrowing.
Personal loans under debt review
Personal loans can generally be included in debt review. Your debt counsellor proposes a reduced, affordable instalment and may negotiate a lower interest rate. The loan is then repaid through the single monthly payment distribution.
You cannot take out a new personal loan while under debt review, which prevents the debt from compounding further.
Credit cards under debt review
Credit card accounts are included in the restructuring, and the card cannot be used for new purchases while under debt review. The outstanding balance is repaid through the restructured plan, often with a negotiated lower interest rate.
High compound interest on credit cards is one of the main reasons consumers become trapped, so reducing that rate can make a significant difference.
Overdrafts and store cards
Overdrafts and store accounts are also forms of unsecured credit and can generally be included. The same restructuring principles apply: one combined payment, potentially reduced interest, and no new borrowing during the process.
Store cards in particular often carry very high interest rates, making them a common contributor to over-indebtedness.
Interest rates and repayments
Under debt review, interest rates on unsecured debt may be negotiated down as part of the restructuring proposal. Reductions are not guaranteed and depend on the credit provider and circumstances, but they are a common feature of the process.
The goal is to ensure more of each payment goes toward reducing the capital balance rather than servicing interest.
Loans vs consolidation vs debt review
Taking a new loan to pay off existing debt does not reduce what you owe and often adds new interest. Debt consolidation requires qualifying for a new loan, which is unlikely if you are already in arrears. Debt review, by contrast, restructures existing debt without new borrowing.
For over-indebted consumers, debt review is usually the more appropriate route.
Frequently Asked Questions
Worried That Your Debt Has Become Unaffordable?
Debt Guidance can assess your income, essential expenses and debt commitments to determine whether debt review may be appropriate.
Reviewed by Carolina Guevara Harris
Registered Debt Counsellor · NCRDC3152
Last updated: 17 September 2025
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