Debt Counselling

Debt counselling assists overindebted consumers who are struggling to meet their financial obligations.

Is it a mission to pay your instalments at the end of the month? Do your debt and expenses exceed your income? Do you have creditors reminding you to pay your debt every month? Are you paying one debt with another debt?

If your answer to these questions is yes, it’s time to consult a debt counsellor.

They will help you create a payment plan to sort out your financial situation. They will negotiate lower instalments and an extended term with your creditors to help you unlock extra cash to use for your other day-to-day expenses or even savings.

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Why should you apply for debt counselling?

1. You only pay one reduced payment

Overindebted individuals usually owe more than one lender. Over time this becomes overwhelming and it starts being impossible to pay all these lenders on time.

A debt counsellor will negotiate with your creditors to reduce your monthly payments. Once this is done, your debt counsellor will consolidate these payments into one big payment.

The total amount you pay each month will be less than the amount you used to pay before you joined debt counselling. This payment will be distributed to all your creditors accordingly.   

2. Debt counselling protects you from the creditors

If you don’t stick to your credit agreements, your creditor will take legal action against you. They may repossess your assets, hand you over to debt collectors, or approach the court to issue a judgement against you.

If you participate in the debt counselling programme, your creditors have no right to the above. If they do, they are acting against the law and you can lodge a complaint to the Credit Ombudsman.

How does the debt counselling process work?

Before you join the debt counselling programme, the debt counsellor will do an assessment to see if you’re indeed overindebted. They will request your proof of income and your bank statements to determine your debt-to-income ratio. If your debt is too high, you’ll be declared overindebted.

If you are declared overindebted, your debt counsellor will create a repayment plan, that you will sign, stating how much should go to each creditor. Once the creditors approve this repayment plan, you will start making payments.

How much do you pay for debt counselling?

According to the National Credit Regulator (NCR) you are required to pay the following fees for debt counselling:

  • A once-off restructuring fee of 100% of your debt rehabilitation amount up to a maximum as per the NCR’s guidelines.
  • A once-off application fee of R57.50 including VAT.
  • A once-off administration fee of R345 including VAT for your application as per the NCR guidelines.
  • A sundry fee equivalent to your monthly debt rehabilitation amount for your legal application to the Magistrate Court.
  • A reckless lending fee up to R1,725 including VAT.
  • A monthly aftercare fee of 5.75% including VAT of your monthly debt rehabilitation amount for every month that you are under debt counselling.
  • A monthly transactional payment distribution fee as per the NCR.

What happens when you complete the process?

The debt counselling process will depend on the amount of your debt and your monthly repayments. To cut the process short, you will need to increase your instalments, or make lump sum contributions occasionally.

When you complete the debt counselling programme, you will be issued a Clearance Certificate which is proof that you have settled your debt.

Does debt counselling affect your credit score?

Consider debt counselling as a way of fixing your credit score. Now that you’re being rehabilitated, your credit score is on its way to recovery. 

However, that does not mean you qualify for credit. The law prohibits creditors from extending credit to people who are undergoing debt counselling. The credit bureaus will flag your name until you have completed the debt counselling process.

Are you allowed to apply for credit after debt counselling?

After debt counselling, you can apply for credit because you’re now rehabilitated. Ensure that you submit your Clearance Certificate to the credit bureaus so that they can update your information. If you do not do so, your name will not be cleared and you will not be granted credit. 

Debt counselling can give you much-needed relief. Think about it as a way of getting you “back in the game” again. It gives you a chance to rethink your credit and finances. When you come out of it you will not only be debt-free, but you will also be able to handle your money better.

For more information on debt counselling read our debt counselling guide below.


The guide below helps to explain debt counselling. If you still have questions after reading the guide, ask our debt expert or you can also visit our FAQ page.


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