The affordability assessment explained
The affordability assessment is the legal heart of South African credit. Section 81 of the National Credit Act requires a credit provider to take reasonable steps to establish that you understand the agreement and can afford it, before granting it. Granting credit without doing so is reckless lending, and a court can set the agreement aside.
What you need to know
The calculation starts with verified gross income, subtracts statutory deductions, then subtracts a minimum living expense figure the regulations prescribe by income band, then subtracts your existing debt instalments. What remains is what an instalment can come out of.
The minimum living expense assumption is why applicants are sometimes declined despite believing they can afford it. The regulations do not let a lender assume you live on nothing, even if you say you do.
Everything leaving by debit order counts, not just credit: insurance, policies, school fees, gym. Applicants routinely forget these and are surprised by the outcome.
The assessment is also your protection. If a lender granted you credit it should have known you could not afford, the agreement was recklessly granted — and the remedies under the Act, including suspension of the agreement, are meaningful.
There is no legal “no credit check” loan in South Africa
The National Credit Act requires every registered credit provider to run an affordability assessment and check your credit record before granting credit. A lender advertising guaranteed approval or no checks at all is either not registered or not telling you the truth. What does vary is how much weight a lender puts on your credit score — some short-term lenders look harder at your recent bank statements than at your bureau record.
Related
Sources and last checked
- National Credit Act 34 of 2005 and its regulations — Government, as at 10 August 2026.
Page last checked 10 August 2026. Statutory caps and lender terms change — confirm anything you intend to rely on with the provider or the National Credit Regulator. Found something wrong? Tell us and we will correct it.