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I can’t pay my personal loan – what should I do no

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Can’t pay your personal loan this month? Or next month?

You’re not alone—and you’re not doomed either.

Whether it’s a cash flow issue or a full-on financial crisis, there are steps you can take right now to avoid legal trouble and protect your credit.

Here’s what you can do.

 

I can’t pay my personal loan – what should I do?

If you can’t pay your personal loan, contact your lender immediately to explain your situation and request new repayment terms. Most lenders offer solutions like payment holidays, debt restructuring, or referrals to debt counselling. Avoid ignoring the issue, as it can lead to penalties, legal action, and a damaged credit score.

You’re in a difficult situation, but you have more power than you think.

By law (under the National Credit Act), South African lenders have to consider reasonable alternatives when a borrower is in financial distress.

 

Struggling to keep up with your debt?
Our team can help make your debt affordable once again.

We help thousands of South Africans reduce monthly debt costs, protect their assets, and stay out of court—find out what we can do for you.

 

Start there. And avoid the following…

 

What not to do if you can’t pay your personal loan

Ignoring missed payments is the worst thing to do in this situation. If you stop paying or don’t pay the full amount, things start to go wrong very quickly.

Do not:

  • ❌ Skip payments
  • ❌ Underpay what you owe
  • ❌ Ignore the personal loan
  • ❌ Ignore calls or emails from the lender

 

This is what could happen if you stop paying and ignore the debt:

  • Extra costs like additional interest, late fees, and penalties start to build.
  • The lender may hand your account over to debt collectors.
  • Your credit score will take a significant hit.
  • Legal action could be taken against you, including a court judgment or a garnishee order.

 

Remember, radio silence makes everything worse.

Avoid borrowing from loan sharks or taking on more high-interest debt to cover the shortfall—it often makes things worse in the long run.

And while desperate moves may feel tempting, try to avoid using new loans or more credit to pay the personal loan. It doesn’t work. The debt only builds faster and faster over time.

 

What to do if you can’t pay your personal loan

If you can’t pay your personal loan, the most important step is to act quickly. Contact your lender, explain your situation honestly, and ask about options like a payment holiday, lower instalments, restructuring, or debt counselling. Which can help protect you from legal action and make repayments more manageable. 

Steps to take if you can’t pay your personal loan:

  1. Contact your lender immediately
  2. Request a payment holiday or restructuring
  3. Consider debt counselling
  4. Prioritise essentials and reassess your budget
  5. Get financial advice

 

1. Contact your lender immediately: Be honest and upfront. Lenders in South Africa are required to consider reasonable repayment alternatives under the National Credit Act.

2. Request a payment holiday or restructuring: Some lenders offer short-term relief (like skipping a few payments) or extending the loan term to reduce your monthly instalment.

3. Consider debt counselling: If you’re over-indebted, a registered debt counsellor can help you renegotiate your obligations under formal debt review.

Debt review offers several advantages that make it easy to keep paying debt when you can’t afford it. Plus, it offers legal protection against things like car repossession or garnishee orders (these allow lenders to take income to repay the debt).

4. Prioritise essentials and reassess your budget: Make sure your basic needs are covered first. Then trim unnecessary spending to redirect funds to debt.

5. Get debt-related advice: Our team at My Debt Hero can help guide you through what to do. Plus, you can talk to organisations like the National Credit Regulator (NCR) or the Credit Ombud.

The right advice—and the right plan—can seriously change the outcome.

 

debt review calculator

What is your estimate?

Try our debt reduction calculator to calculate your lower monthly debt instalment*.

*The calculation is an estimate actual amounts may vary.

What is your estimate?

Try our debt reduction calculator to calculate your lower monthly debt instalment*.

*The calculation is an estimate actual amounts may vary.

debt review calculator
Tool - Debt Review Calculator

Enter how much you're currently paying every month for each of the debts below

 

If applicable, enter your current monthly repayment amount for your home and vehicle debt below.

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Continue by adding what you pay each month for each category below.

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Click 'Check your estimate' to estimate your reduced monthly debt repayment under debt review.

Current Monthly Debt Instalment

This is the total amount that you're currently spending on your debt each month.

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🏆 New Reduced Debt Instalment

This is an estimate of your reduced monthly debt repayment - what you could be paying instead.

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So, what other choices do you actually have if your debt feels unmanageable?

 

What options do you have if you can’t pay your personal loan?

  • Negotiate new terms with your lender – Ask for lower instalments or a longer repayment period.
  • Apply for a payment holiday – Temporary relief where you skip payments for 1–3 months, though interest still accrues.
  • Enter debt review – A formal process that protects you from legal action and restructures your debts into one affordable monthly payment.
  • Debt consolidation loan – Combine multiple debts into one, ideally at a lower interest rate, to simplify and reduce payments.
  • Adjust your budget – Trade in your car, cancel subscriptions, ask to work from home, start eating budget meals—anything that can save money, so you can afford the loan repayment.
  • Voluntary sequestration – As a last resort, declare insolvency. Your assets may be sold to settle debts, and you’re released from further liability after rehabilitation.

Whether you need breathing room or a total reset, these options can help you avoid serious damage.

But what if you don’t—or can’t—take action? What happens?

(You may not like this next part…)

 

What happens if you don’t pay back a bank loan in South Africa?

If you don’t pay back a bank loan in South Africa, you will be charged late fees and even extra interest. The bank reports you to credit bureaus and hands your account to debt collectors, who will take legal action to recover the debt through methods like repossession or taking money from your salary or accounts.

Things can go bad quickly if you stop paying back your debt.

What happens if you don’t pay?

  • Late fees and interest
  • Negative credit reporting
  • Debt collection process
  • Legal action and court judgment
  • Garnishee (emoluments attachment) order
  • Asset repossession
  • Harder to get credit in the future

 

Late fees and interest: Your lender will charge additional interest on the overdue amount and may apply penalty fees, increasing your total debt.

Negative credit reporting: Missed payments are reported to credit bureaus like TransUnion and Experian, which can significantly drop your credit score. This affects your ability to qualify for future credit, cellphone contracts, or even rental applications.

Debt collection process: After multiple missed payments, your account may be handed over to a debt collector or legal department. This can include persistent contact attempts and added collection fees.

Legal action and court judgment: The lender may apply for a judgment against you through the Magistrate’s Court. If granted, this becomes a public record and stays on your credit report for up to 5 years.

Garnishee (emoluments attachment) order: If the court rules in the lender’s favour, your employer may be ordered to deduct repayments directly from your salary.

Asset repossession: If the loan is secured (e.g. against a car or property), the bank can seize the asset to recover what’s owed, subject to court processes.

Increased difficulty accessing credit: Once you’re listed as high-risk, even non-bank lenders may decline future loan applications.

That’s a lot, right? But knowing the risks puts you back in control.

⭐ Related content:

 

Can I go to jail for not paying a personal loan?

No, you can’t go to jail for not paying a personal loan in South Africa. The Constitution protects South Africans from being jailed for failing to pay a loan. However, if you commit fraud or ignore a court order, criminal consequences may follow—but not for the debt itself.

You can’t go to jail for debt alone—but if you break the law around it, that’s another story.

Still, legal problems can arise if you lie on your application or refuse to cooperate with court proceedings.

So, where does all this leave you?

 

Final thoughts

Can’t pay your personal loan? Here’s your game plan:

  1. Contact your lender.
  2. Explore payment holidays or restructuring.
  3. Consider debt review if you’re overwhelmed.
  4. Avoid risky loans and take free financial advice.

 

Ignoring debt problems doesn’t work. It only makes things more expensive in the end.

If you want a solution, talk to our team at My Debt Hero. We can help you use government-approved laws to make your personal loan affordable again.

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