Lonwabo Mtyeku | Photo Credit: Supplied
21 January 2026 – For many South Africans, borrowing is an unavoidable part of everyday life. But as the new year begins, financial pressure often intensifies. School-related expenses, festive season spending and the lingering effects of December debt frequently collide in January, creating what many refer to as “Januworry”. In this climate, making smart and informed borrowing decisions has never been more important.
While credit can be a useful financial tool, experts warn that taking on debt without proper planning can quickly lead to long-term financial strain. Responsible borrowing, they say, is not about avoiding loans altogether, but about understanding the purpose, cost and long-term impact of credit before committing.
Start with the “why”
Before applying for any form of credit, consumers are encouraged to clearly define the reason for borrowing. Is the loan addressing a genuine need, supporting long-term financial growth, or simply covering short-term shortfalls?
“Credit should serve a productive purpose,” says MJ Davis, CEO of FNB Retail Loans. “When borrowers are clear about why they need credit, they’re more likely to choose the right product and avoid unnecessary financial stress. Lenders also assess purpose – borrowing to cover ongoing monthly expenses can raise red flags compared to borrowing for planned or essential needs.”
Know what you can truly afford
Affordability remains one of the most critical elements of responsible borrowing. A loan is a long-term commitment that must fit comfortably within your monthly budget.
Consumers are encouraged to calculate affordability based on net income, after deductions, and to account for fixed expenses such as housing, transport, food and insurance before factoring in variable costs like utilities and data.
“Without a realistic affordability check, a loan can quickly shift from being helpful to becoming a burden,” Davis explains. “Borrowers should be honest about what they can sustain month after month.”
Understand the true cost of credit
Low monthly instalments can be misleading. The total cost of credit includes interest, initiation fees, service fees and, in some cases, credit insurance. Over longer terms, these costs can add up significantly.
Using loan calculators and comparing different repayment periods can help consumers understand how much they will ultimately repay and how small changes in interest rates or loan duration affect overall cost.
Keep your credit profile healthy
A consumer’s credit record plays a major role in determining access to future credit and the interest rates offered. Regularly checking your credit report allows you to identify errors, track your borrowing behaviour and avoid unpleasant surprises.
“Your credit profile tells a story over time,” Davis notes. “Applying for several loans in quick succession, even if repayments are up to date, can signal financial distress and negatively affect your score.”
Be wary of ‘too good to be true’ offers
Consumers are urged to approach fast or aggressive credit offers with caution. Reputable lenders allow time for consideration, encourage questions and provide clear explanations of terms and conditions.
The same caution applies to third parties offering quick-fix debt solutions. “No one should feel pressured into taking on debt or entering debt review without fully understanding the consequences,” Davis says. “Decisions made out of fear or urgency often lead to long-term financial harm.”
Speak up before things spiral
Avoiding lenders when finances become tight can worsen the situation. According to FNB Retail Collections Executive Head Patricia Temba, early engagement is key.
“Financial difficulties can happen to anyone,” she explains. “When customers speak to us early, we’re often able to explore solutions that prevent long-term damage to their credit records. Silence usually limits those options.”
A smarter way forward
January may amplify the urge to borrow, but experts stress that thoughtful decision-making can make all the difference. Responsible borrowing is about balance — meeting immediate needs without compromising future financial stability.
“Taking time to assess your options, understanding your limits, and choosing credit wisely is an act of financial self-care,” Davis concludes. “The goal is not just to get through the month, but to build a healthier financial year ahead.”
