The way people use credit often reveals more about their economic reality than income statistics ever could. And, in an economy where financial shocks are routine, unsecured credit increasingly acts as a stabiliser rather than a tool for occasional splurges.
Research by specialist loans provider DirectAxis shows that South Africans typically apply for personal loans to cover emergencies, fund home renovations, and education costs.
The research polled registered users of Pulse, a free digital tool that allows users to check their credit rating, track their income and expenses, and receive guidance on how to improve their financial standing. The poll ran between December 2025 and January 2026 and drew responses from nearly 21,000 Pulse users.
“The findings suggest that unsecured credit is primarily used as a pressure valve rather than a lifestyle enabler,” says DirectAxis’ CEO, Yasmin Abrahams. When asked why they applied for a personal loan, 28% said it was to cover emergency expenses. Just under 20% wanted the money to renovate their homes, while nearly 11% said they would spend it on education.
Smaller but notable proportions of respondents said that they used personal loans to start a business (10%) or to purchase or repair a vehicle (8%). Only a small minority reported using unsecured credit for discretionary spending, 7% citing lifestyle expenses, such as celebrations or clothing purchases, and just 2% saying they would use a loan to fund a holiday.
“What’s reassuring is that the vast majority of respondents are not using unsecured credit to fund unnecessary expenditure,” adds Abrahams. This indicates that personal loans are largely being used to manage real financial needs rather than impulse spending.
Ease of access also plays a significant role in borrowing decisions. 35% of respondents said they chose a personal loan rather than other types of credit because the process is straightforward, while 30% cited speed of approval. 30% said it was because they were unable to get any other credit, while another 30% did so because the approval process was quicker.
In terms of borrowing frequency, 26% said they applied for a personal loan only occasionally, typically when faced with unexpected expenses. Fifteen percent said they used unsecured credit for large, once-off purchase, such as household appliances. Meanwhile, 21% reported applying for personal loans monthly in order to make ends meet. Interestingly, 22% of respondents said they had never applied for a personal loan, despite actively using Pulse to monitor their financial wellbeing.
“It’s notable that a significant portion of Pulse users are engaging with the tool to monitor their financial health without necessarily borrowing,” says Abrahams. “At the same time, those who rely on credit to make ends meet could benefit from the budgeting tools and guidance available on Pulse, which are designed to help people make more informed financial decisions.”
Together, the findings point to a consumer base under sustained financial pressure, but one that is largely deliberate and considered in how it uses unsecured credit.