They are not two versions of the same thing
The Reserve Bank raised the repo rate to 7.25% on 23 September 2026, taking prime to 10.75%. It is the second increase this year, and anyone with variable-rate debt felt it in their next instalment. When the monthly total stops fitting, two options come up quickly: a debt consolidation loan and debt review. Both promise one affordable payment instead of several unaffordable ones. That is where the similarity ends.
A consolidation loan is a new credit agreement. You borrow enough to settle your existing debts and then repay the single new loan. Nothing is restructured; you have simply replaced several creditors with one.
Debt review is a legal process under section 86 of the National Credit Act. A debt counsellor registered with the National Credit Regulator (NCR) assesses whether you are over-indebted, negotiates lower instalments and longer terms with your creditors, and the restructured plan is confirmed by a court or the National Consumer Tribunal.
The difference that matters most is protection. Debt review comes with it; a consolidation loan does not.
Before either: talk to your creditor
The NCR's own advice for an over-indebted consumer starts with a phone call: approach the credit provider and ask for lower instalments. If that fails, contact a registered debt counsellor. It also helps to know that before a credit provider can go to court to repossess goods, it must send you a written notice (a section 129 letter) that lists your options, including getting help from a debt counsellor. Do not ignore that letter, because it is often the moment the choice is still yours.
If the problem is one instalment agreement you can no longer afford, such as a car, the Act also lets you give written notice to surrender the goods through the proper process. That has consequences for what you still owe, so it is worth reading car finance and balloon payments before you decide.
What debt review actually gives you
- Legal protection. Once you apply, creditors cannot take legal action or repossess assets covered by the review while it runs properly. The protection applies to the debts included in the process.
- Reduced instalments, negotiated by the counsellor. This is the part a consolidation loan cannot deliver, because your creditors have no reason to renegotiate with someone who is not in the process.
- A single monthly payment, made to a payment distribution agency registered with the NCR, which pays your creditors for you. The debt counsellor is not allowed to act as that agency.
- A check on how you were lent to. If the counsellor believes an agreement was reckless lending, the matter can be referred to a court, which has the power to suspend or set aside the agreement.
The trade-offs are significant. While you are in debt review your name is listed at the credit bureaus as a consumer undergoing debt counselling, and you cannot get new credit. That is the point, not a side effect, but it means no vehicle finance, no home loan, no new store account for the duration. Plans commonly run three to five years, depending on how much you owe and what the restructured terms are.
It ends with a clearance certificate, which your debt counsellor must issue within seven business days of confirming that the debts under review are paid in full. The counsellor sends it to the NCR and the credit bureaus, and the debt review listing is removed. Give the bureaus a few weeks to update, then check your own report.
What debt review costs
It is not free, and the cost sits on top of your repayments. The application fee is R50. Beyond that, the NCR publishes a fee guideline that registered counsellors are expected to follow. Under the 2018 guideline the restructuring fee is capped at R8,000 (R9,000 if you are married in community of property) and is the lesser of that cap or one month's payment to creditors under the plan. After the second month there is an aftercare fee of 5% of the monthly amount paid to creditors, capped at R450 a month. The amounts are quoted excluding VAT. On a plan where R6,000 a month goes to creditors, aftercare works out at R300 a month.
The payment distribution agency charges its own small fee on top, and if creditors reject the proposal and legal work is needed, attorney fees are not set by the NCR and should be agreed in writing at the start. Because the guideline is not a price list, ask for every fee in writing before you sign and compare it to the guideline.
When a consolidation loan is the right answer
A consolidation loan works in a narrower set of circumstances than it is marketed for. It is genuinely useful when:
- You are keeping up with payments but they are fragmented and expensive.
- Your credit record is good enough to be offered a rate lower than the weighted average of what you are currently paying.
- The new term is not dramatically longer than what it replaces.
- You are confident you will not run the cleared accounts back up.
That last point is where most consolidation loans fail. Settling five accounts leaves five open facilities with zero balances. Within eighteen months many people are servicing the consolidation loan and the re-accumulated balances, which is a worse position than they started in. Close the accounts as you settle them.
The arithmetic is where the marketing breaks down, so do it on paper. Take R120,000 of debts that currently cost an average of 24% and have 36 months left. You pay about R4,708 a month, R169,500 in total. A consolidation loan at a much better 18% over 84 months drops the instalment to about R2,522, a relief of R2,186 every month. It also costs about R211,900 in total, roughly R42,400 more than the debts it replaced, even at the lower rate. The same 18% over 36 months is R4,338 a month and R156,200 in total, about R13,300 less than where you started. The rate was never the problem; the stretched term was. These are illustrative rates, so put your own into a loan calculator before you accept any quote.
The warning signs of the wrong provider
Shopping for either product means dealing with intermediaries whose incentives are not identical to yours. This is an industry with good operators and predatory ones. Some things that should stop the conversation:
- A consolidation loan secured against your house or car when the debts being consolidated are unsecured. You have converted debt that could not take your home into debt that can.
- Anyone promising to remove accurate negative information from your credit record. That cannot lawfully be done.
- A debt counsellor who will not give you their NCR registration number. Registered counsellors are listed on the NCR's register, and the NCR contact centre is on 0860 627 627 if you want to check.
- Fees that are not in writing, or that do not match the NCR guideline.
- Pressure to decide immediately, or a quote that names only the monthly instalment and never the total.
It is also worth knowing the in duplum rule, codified in section 103(5) of the National Credit Act: on a defaulting account, the interest, fees and charges that accumulate cannot exceed the outstanding capital amount. A balance that appears to have grown without limit may be overstated.
How to tell which side you are on
The honest dividing line is whether you can currently service your obligations.
If you are meeting every payment and the problem is cost and admin, you are a consolidation candidate, and you should shop the rate hard. If you are already missing payments, borrowing to cover instalments, skipping one account to pay another, or your obligations exceed what your income can carry at any reasonable rate, you are over-indebted, and a new loan will not fix a structural shortfall. The NCR lists exactly those behaviours as signs of over-indebtedness. That is what debt review exists for, and delaying it usually means arriving there later with judgments attached.
Getting out, and what can go wrong
Debt review is easier to enter than to leave, and it is worth knowing the exits before you commit.
If the counsellor finds you are not over-indebted, the application is declined and nothing is restructured. If you are found over-indebted and the plan is confirmed by a court, you are in it until the debts under review are settled and the clearance certificate is issued.
The common failure is missing payments. If you stop paying under the restructured plan, a credit provider can apply under section 86(10) of the National Credit Act to terminate the review in respect of its agreement and proceed with enforcement, which means the protection falls away for that debt. This is the worst of both positions: the listing on your profile with none of the shelter.
The other thing to plan for is the end. A clearance certificate removes the debt review listing, but it does not manufacture a credit history. You come out with several years of no new accounts behind you, which is a thin file. Rebuilding usually starts with one small, well-managed account rather than an immediate application for vehicle finance. How credit scores work explains what the bureaus will be looking at.
Quick answers
Does debt review ruin my credit record permanently?
No. Your profile is listed for the duration and you cannot take new credit while it runs. On completion the counsellor issues a clearance certificate, it goes to the NCR and the bureaus, and the listing is removed.
Can I get credit while under debt review?
No. The NCR says you will not be able to access credit while under debt counselling, and a lender that grants it anyway risks the agreement being declared reckless.
Is a consolidation loan cheaper?
Only if the new rate beats the weighted average of what you are replacing and the term is not much longer. A lower monthly payment over a longer period usually costs more in total, even at a better rate.
How much does debt review cost?
A R50 application fee, a restructuring fee that the NCR guideline caps at R8,000 (R9,000 for those married in community of property), and an aftercare fee of 5% of the monthly plan amount up to R450, all excluding VAT. Get the full list in writing before you sign.
Seeing the position clearly first
Both routes begin with the same unglamorous step, and it is the one most people skip: writing down every debt, its balance, its interest rate and its monthly instalment, in one place. Until that list exists, any advice you receive is being given on incomplete information, including advice from someone selling you a product.
Budget Hub can show you part of that picture. Its financial health score includes a debt burden measure: what you pay each month towards credit cards, personal loans, store accounts and other debt, as a share of your income. Under about 10% scores full marks on that measure and 36% or more scores zero. It does not count your bond or vehicle finance, so treat it as a quick read on unsecured debt rather than a full affordability assessment, which is what a debt counsellor does. For related reading, save or pay off debt first covers the order of attack, and buy now pay later looks at a product that quietly adds to the same pile.