The National Credit Regulator says about 10 million South Africans are already over-indebted, so any loan you take for December needs a plan for the January bills that follow. Rates have also risen since the Reserve Bank’s 23 September hike, which makes variable-rate borrowing costlier than last year.
Should you borrow at all?
Borrow only when you need to, for example to bridge a salary gap or cover unavoidable costs, and only after checking you can afford the repayments. Borrowing for non-essential festive spending can cause avoidable financial strain.
The National Credit Regulator’s advice is to avoid impulse purchases in the “silly season”, not to let social expectations push you into debt, and to save so that January bills do not overwhelm you.
Why January is the squeeze
- Long gap between pay days. Many employers pay December salaries as early as the 13th, which can leave 42 to 49 days until the next payment.
- Competing bills. Loan repayments fall due alongside school fees, insurance renewals and municipal rates, and the strain can last into February.
What different credit can cost
These figures are from Arcadia Finance, a loan comparison site, and date from August 2025. Rates have changed since, so check current prices with each lender.
| Type of credit | Typical cost |
|---|---|
| Personal loans | 3% to 30% a year (Capitec term loans 12.5% to 28% in August 2025) |
| Store cards | Introductory rates may start around 35% |
| Payday loans | About 5% a month for a first loan, 3% a month for repeat loans |
| Borrowing stokvels | 20% to 50% a month |
As an example, R30,000 over 36 months at a 28% annual rate would cost about R1,360 a month including fees. Initiation fees, late payment penalties and settlement fees all raise the total cost.
A safe-borrowing checklist
- Save early. Open a separate savings account at the start of the year and buy gifts over several months.
- Test the instalment against January. Check that you can pay it after school fees, insurance and rates.
- Use registered lenders. The National Credit Regulator advises using registered credit providers and borrowing only what you can manage.
- Compare the total cost, not just the monthly instalment.
- Avoid payday loans and rolling over debt, because missed or rolled-over repayments grow quickly.
- Check your debt review status. You can do this for free through the National Credit Regulator.