Loan types

Debt consolidation loans in South Africa

A consolidation loan pays off several debts, leaving you one instalment. It can help, but a longer term usually costs more, so get free advice first.

Compare consolidation options
Written by LM editorial teamLast reviewed

How a consolidation loan works

You take one new loan and use it to settle several existing debts. Then you repay only the new loan, in one monthly instalment.

It suits people who can still afford their debts but want them simpler or cheaper. It does not reduce what you owe.

If you are already missing payments, a new loan may make things worse. Get advice before you apply.

  • It can help if the new rate is lower than your current rates and the total cost falls.
  • It can hurt if the term is much longer, because you pay interest for more months.
  • It can hurt if you keep using the cleared store cards or credit cards and build new debt.

Get free help first

Before you borrow more, talk to someone who is not selling you a loan.

Debt review is a legal process under the National Credit Act. A registered debt counsellor proposes lower repayments to your creditors.

While under debt review, you cannot take new credit. Your credit record shows a flag until you get a clearance certificate.

  • National Credit Regulator (NCR): call 0860 627 627. The NCR registers lenders and debt counsellors, and takes complaints about them.
  • A registered debt counsellor: checks whether you are over-indebted and can apply for debt review. Fees follow an NCR guideline, so ask about them upfront.
  • National Financial Ombud (NFO): resolves disputes with credit providers for free. It took over the Credit Ombud's work. Call 0860 800 900.
  • National Consumer Commission: handles complaints under the Consumer Protection Act. Disputes about credit go to the NCR or the NFO.

Why a longer term can cost more

Consolidation loans often lower your instalment by stretching the term. The catch is more months of interest.

The table shows R50,000 at the legal maximum rate, with capped fees and VAT.

Going from 24 to 60 months cuts the instalment by about R1,217. But you repay about R30,325 more in total.

TermMonthly instalmentTotal repaidCost of credit
24 monthsR2,870.11R68,882.67R18,882.67
36 monthsR2,177.48R78,389.28R28,389.28
60 monthsR1,653.47R99,207.95R49,207.95
72 monthsR1,534.03R110,450.01R60,450.01

Worked out at 28.25% a year, the unsecured credit cap since 24 September 2026. Includes the maximum initiation fee and R69 monthly fee. Credit life insurance is not included. A lender may charge less.

Before you sign a consolidation loan

  1. List every debt with its balance, interest rate, instalment and months left.
  2. Ask each creditor for a written settlement letter showing the exact amount to pay it off.
  3. Compare the total you would repay on your current debts with the total in the new loan's quote.
  4. Check the new loan's term, rate, fees and any credit life insurance.
  5. Ask whether the lender pays your creditors or pays you. If you get the money, settle each debt straight away.
  6. Get a paid-up letter for each settled debt, then close those accounts.
  7. Check your credit report afterwards to make sure the old accounts show as settled.

Bank consolidation loans and matching services

Some credit providers offer a dedicated consolidation loan. African Bank's combines up to 5 loans, up to R500,000, over 18 to 72 months.

Read more in our African Bank guide.

Bayport's main loan is now the Bayport Consolidation Loan. It does not publish amounts or rates. See our Bayport guide.

The services listed below are loan-matching services, not lenders. Creditum and Arcadia Finance both forward applications to Myloan.co.za, so use one, not both.

Loan-matching services for larger loans

None of these four lends money. They pass your details to partner lenders. MoneyHello covers up to R25,000; the others go up to R350,000 or R500,000.

MoneyHello logo

MoneyHello

Loan-matching service – not a credit provider

R500 – R25,000 · 3 – 72 months

Apply at MoneyHello →Read our review
Arcadia Finance logo

Arcadia Finance

Loan-matching service – not a credit provider

R500 – R350,000 · 6 – 72 months

Apply at Arcadia Finance →Read our review
Creditum logo

Creditum

Loan-matching service – not a credit provider

R500 – R500,000 · 6 – 72 months

Apply at Creditum →Read our review
Crezu logo

Crezu

Loan-matching service – not a credit provider

R500 – R350,000 · 6 – 72 months

Apply at Crezu →Read our review

NCR-registered lenders are listed first, then loan-matching services, in our commercial order. We may earn a commission if you apply through these links. It doesn't change what you pay. How we make money.

R50,000 over 60 months at the legal maximum

This is the five-year row from the table above, in full. Compare it with what your current debts would cost if you kept paying them.

Amount borrowedR50,000 over 60 months
Maximum interest rate28.25% a year (repo rate 7.25% + 21%)
InterestR43,860.45
Initiation fee (incl. VAT)R1,207.50
Service fees (incl. VAT)R4,140.00
Monthly instalment (60 payments)R1,653.47
Most you would repayR99,207.95

Worked out at the legal maximums under the National Credit Act, with the repo rate at 7.25% (since 24 September 2026). A lender may charge less, never more. Check the exact figure in your pre-agreement quote. See all the legal caps or work out your own loan.

Debt consolidation loans in South Africa: frequently asked questions

Is a debt consolidation loan a good idea?

It can be, if the new loan costs less in total than your current debts. It is a poor idea if a longer term raises the total, or you keep using cleared cards. Compare total costs before you decide.

Can I get a consolidation loan while under debt review?

No. While you are under debt review, you cannot take new credit. Speak to your debt counsellor about your options instead.

What is the difference between debt review and a consolidation loan?

A consolidation loan is new credit that pays off old debts. Debt review is a legal process where a debt counsellor restructures your repayments. Debt review puts a flag on your credit record until you get a clearance certificate.

Can I consolidate my debt with bad credit?

It is harder, because lenders check your credit record and affordability. If you are already behind on payments, a debt counsellor may be a better first step. You can call the NCR on 0860 627 627.

Who pays off my old debts?

Ask the lender whether it pays your creditors directly or pays you. If you get the money, settle each debt straight away. Then ask each creditor for a paid-up letter.

Related pages and sources

Sources

A note on how we work: Lendable Marketplace is a comparison website, not a lender or a registered credit provider. Some lenders listed are directly registered with the National Credit Regulator (NCR); others operate as loan-matching or aggregation services that refer you to a registered provider. Always confirm who you're contracting with, and check any NCR registration number at ncr.org.za, before signing.