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    1. Home
    3. Debt Counselling
    5. Official Guide
    7. Annexure B
    9. 16.5 Reckless Lending Indicator
    Annexure B
    • 1.1The purpose of the Affordability Assessment of the consumer
    • 1.2When the determination in terms of Section
    • 1.3This assessment of the consumer’s financial position
    • 1.4It is therefore required that the affordability assessment
    • 1.5Before a repayment proposal can be completed, an Affordability
    • 2.1Elegibility to apply for debt counselling
    • 2.2Marital Status
    • 2.3To make sure that not all debt
    • 2.4Temporary Loss of Income
    • 3Determination of Gross Income
    • 3.1The Debt Counsellor
    • 3.1.1If the consumer
    • 3.1.2If the consumer
    • 3.1.3In some cases consumers
    • 3.1.4In some cases consumers
    • 3.1.5Should the proceeds be less than the settlement amount
    • 3.1.6In the case of a second home, investment properties or holiday
    • 3.1.7Vehicles not used by the consumer or his or her dependants (i
    • 3.1.8In the case where the consumer
    • 3.2Short Term insurance on assets financed
    • 3.3Joint Bonds Where the consumer who applies
    • 3.4Reckless Lending
    • 4Determination of Nett Income
    • 4.1On making an effective assessment
    • 4.2The consumer(s)
    • 4.3Gross pay
    • 4.4Deductions for irregular income
    • 4.5Statutory deductions or compulsory deductions
    • 4.6Employer deductions
    • 4.7Use the following guidelines in respect of other income
    • 5Determination of Reasonable Living Expenses
    • 5.1The purpose of setting minimum criteria
    • 5.2The proposed guidelines in the table below take into account
    • 5.3Spending Guidelines
    • 6Determination of Available Income
    • 7.1Required Expenses
    • 7.1.1Rental, where no bond
    • 7.1.2Debt Counsellors could ask the following questions
    • 7.1.3Groceries (food, toiletries, cleaning materials) - groceries
    • 7.1.4Water & Lights (if not part of rental)
    • 7.1.5Rates & Taxes (if consumer
    • 7.1.6Body corporate levies
    • 7.1.7Domestic workers depending on circumstances, e
    • 7.1.8Education
    • 7.1.9Consumers may apply for subsidised school fees
    • 7.1.10Existing tertiary education
    • 7.1.11Transport (public transport and/or reasonable running expenses
    • 7.1.12Telkom phone or cellular phones or internet access within
    • 7.1.13Multiple cellular phones
    • 7.1.14Encourage consumer to set limits on cellular phone contracts
    • 7.1.15Maintenance that should be paid
    • 7.1.16Utilities but encourage the consumer to reduce usage where usage
    • 7.1.17Clothing and shoes within reason, higher amount for growing
    • 7.1.18Chronic medication (obtain proof that not covered by medical aid
    • 7.1.19Support of relatives with valid reasons
    • 7.1.20Financial Services - Debt Counsellors
    • 7.1.21Medical Aid - the consumer
    • 7.1.22Life Assurance
    • 7.1.23Credit Life - money that a consumer pays to an insurance company
    • 7.1.24Insurance - money paid to an insurance company to protect
    • 7.1.25Anything else that can be regarded as required
    • 7.2Non-Required Expenses
    • 7.2.1Domestic worker/s (unless
    • 7.2.2Garden services
    • 7.2.3Alcoholic beverages
    • 7.2.4Tobacco/cigarettes
    • 7.2.5Entertainment
    • 7.2.6DSTV or MNet - consider downscaling at the end of the contract
    • 7.2.7Recreation / club memberships
    • 7.2.8Children’s pocket money
    • 7.2.9Tithes / donations
    • 7.2.10Cosmetic services / beautician / pampering sessions
    • 7.2.11Some allowance
    • 7.3Luxurious Items
    • 7.3.1Multiple properties
    • 7.3.2If a property
    • 7.3.3Boat, Jet Ski, sun bed and other “toy” items
    • 7.3.4Luxury vehicles used as the only means of transport by consumer
    • 7.3.5Luxury vehicles not used by the consumer on a daily basis
    • 7.3.6Holiday clubs
    • 7.3.7Gambling
    • 8Restructuring Proposal
    • 8.1Establish whether there
    • 8.2Any available cash resources, bonuses or thirteenth cheques
    • 8.3Consider to downsize from an expensive luxurious vehicle
    • 8.4If a fixed property (house)
    • 8.5Consider whether the consumer
    • 8.6Make sure that all expenditure
    • 8.7If revised living expenses exceed income then the consumer
    • 8.8If the consumer’s revised living expenses
    • 9Broad Guideline forSpending Patterns
    • 10Annual Review
    • 11Recognising and Dealing with Addictive Behaviours
    • 12Conclusion Consumers are over-indebted if too much
    • 13Annexure b1 – Affordability Assessment Process Steps
    • 14Annexure b2 – Affordability Assessment Check List
    • 14.1Affordability Assessment
    • 14.2Interview with Consumer
    • 14.3Verify Consumer Details
    • 14.4Verify Debt
    • 14.5Verify Income
    • 14.6Check for Reckless Lending
    • 14.7Review Asset Statement
    • 14.8Revise Budget
    • 14.9Verify Short Term Insurance Required by Debt Agreements
    • 14.10Affordability Amount
    • 16.1Check that the rates applicable to the debt
    • 16.2Note that contracts entered into before June
    • 16.3The possible reckless debt indicator needs to be completed
    • 16.4Where the monthly debt repayments exceed the maximums, as per
    • 16.5Reckless Lending Indicator
    • 16.6When the Reckless Debt Indicator
    Annexure B
    16.5
    Annexure B
    p. 52

    Reckless Lending Indicator

      Reckless Lending Indicator Percentage of After Tax Income After Tax Income required to pay Monthly Debt Payments R 0 – R 2 000 TBC % R 2 001 – R 5 000 TBC % R 5 001 – R 10 000 TBC % R 10 001 – R 20 000 TBC % R 20 001 – R 40 000 TBC % R 40 001 – R 60 000 TBC % R 60 000+ TBC %

    NDRC Practice NoteLast reviewed 2026-04

    Legal context

    The indicator is a desktop test built from the consumer's credit bureau profile and bank statements. It does not displace the full Annexure B affordability assessment, which remains the primary evidentiary record.

    Drawn from NDRC's active case work. For your situation, see our debt counselling overview.

    Cite this clause

    National Credit Regulator. (2015). Annexure B — Debt Review Assessment Guidelines, clause 16.5: Reckless Lending Indicator. Guideline 001/2015 (Debt Review Task Team Agreements 2010), p. 52.

    Related clauses

    16.1
    Annexure B
    Check that the rates applicable to the debt
    16.2
    Annexure B
    Note that contracts entered into before June
    16.3
    Annexure B
    The possible reckless debt indicator needs to be completed
    16.4
    Annexure B
    Where the monthly debt repayments exceed the maximums, as per
    Previous
    16.4 Where the monthly debt repayments exceed the maximums, as per
    Next
    16.6 When the Reckless Debt Indicator
    Learn more about Debt Counselling

    Discover how debt counselling can help you manage your finances and protect your assets.

    Based on NCR Guideline 001/2015, p. 52. For NDRC's interpretation and application, see our debt counselling overview. Download original PDF.
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    Sibabalwe Samora Dakana

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    The National Debt Review Center (NDRC) is a registered debt counselling practice with the National Credit Regulator (NCR Registration: NCRDC3106). Our services are conducted in strict accordance with the National Credit Act 34 of 2005 and NCR Circular 09 of 2025 regarding DHS status updates.

    Important: Debt review is a regulated legal process. While under debt review, you will be unable to obtain further credit until a Clearance Certificate (Form 19) is issued or a court order declares you no longer over-indebted.

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