Credit Restructuring Rules

Does Debt Review Reduce Interest Rates?

In many cases, yes. Under the credit industry's National Debt Review Task Team guidelines (DCRS - Debt Counselling Rules System), South African credit providers frequently agree to substantially reduce interest rates on unsecured credit—often from 20%+ down to concessionary rates—to make repayment feasible for over-indebted consumers.

By Carolina Guevara Harris (NCRDC3152)•Updated for 2025

How Interest Reductions Work in Practice

When a consumer is paying typical retail and bank interest rates (e.g. 24% to 28% per annum on revolving cards and personal loans), the majority of their monthly payment goes toward financing charges and service fees rather than paying down the actual borrowed capital.

During formal debt counselling, your registered debt counsellor runs your financial profile through the industry-standard DCRS software. If your disposable income cannot service accounts at original contract rates, the system calculates concessionary interest proposals for major banks (Standard Bank, ABSA, FNB, Nedbank, Capitec) and retail store creditors.

Illustrative Case Comparison

Typical Restructuring Impact on Unsecured Accounts

Before Debt Review

• Average Interest: 24.5% - 28.0%

• Monthly Instalments: R14,200

• Capital Paydown: Less than 15%

• Threat: Constant arrears & demand letters

Under Debt Review Proposal

• Concessionary Interest: Negotiated lower

• Restructured Instalment: R7,800

• Capital Paydown: Substantially accelerated

• Protection: Section 86 legal stay

Important Notice: Examples are illustrative of actual or potential restructuring outcomes and do not guarantee that another consumer will receive the same rates or savings. Reductions are subject to credit provider agreements and court or tribunal consent orders.

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