Personal loan affordability checks: what a registered credit provider must assess, and what you must disclose

Before a registered credit provider lends, section 81 of the National Credit Act requires it to take reasonable steps to assess your finances and understanding. Regulation 23A requires it to validate your income, normally from payslips or bank statements. You must answer fully and truthfully.

Olvian is a referral service, not a credit provider. We do not lend, we do not offer or advertise credit, and we do not decide whether you can afford a loan. This guide describes the rules that registered credit providers follow.

What must a registered credit provider check before lending?

Section 81(2) of the National Credit Act, 2005 (NCA) says a credit provider must not enter into a credit agreement without first taking reasonable steps to assess:

• your general understanding and appreciation of the risks and costs of the proposed credit, and of your rights and obligations under a credit agreement;
• your debt repayment history as a consumer under credit agreements;
• your existing financial means, prospects and obligations; and
• if you have a commercial purpose for the credit, whether there is a reasonable basis to conclude that it may prove successful.

Section 81(3) says a provider must not enter into a reckless credit agreement with you.

Section 82(1) lets the provider decide its own mechanisms, models and procedures for the assessment, as long as they produce a fair and objective assessment and are not inconsistent with the affordability assessment regulations. That is why two providers can reach different answers on the same application.

What is reckless credit?

Section 80(1) says an agreement is reckless if, at the time it was made, either:

1. the provider failed to do the assessment that section 81(2) requires, whatever the assessment would have found; or
2. the provider did the assessment but went ahead although the information available to it indicated that you did not generally understand or appreciate your risks, costs or obligations under the agreement, or that entering into it would make you over-indebted.

Section 80(2) says whoever decides whether an agreement was reckless must apply those criteria as they stood when the agreement was made, and must not take into account your later ability to meet the obligations or to understand them. In short, the question is what the provider knew and did at the time.

What does Regulation 23A add?

Regulation 23A of the National Credit Regulations, 2006 sets out criteria for the affordability assessment. It applies to current, prospective and joint consumers and to all credit providers, for agreements covered by the Act. It does not apply to agreements where the consumer is a juristic person, nor to the categories listed in regulation 23A(2), such as developmental credit, school and student loans, pawn transactions and emergency loans.

The regulation requires a provider to:

• take practicable steps to assess your discretionary income, to see whether you have the financial means and prospects to pay the proposed instalments (23A(3));
• take practicable steps to validate your gross income (23A(4));
• use the average gross income over not less than three pay periods before the application where your monthly income varies materially (23A(5)); and
• calculate your existing financial means, prospects and obligations, as sections 78(3) and 81(2)(a)(iii) of the Act envisage (23A(8)).

Regulation 23A(9) and (10) also require the provider to use a table of minimum expense norms, set by monthly gross income, to deduct statutory deductions and minimum living expenses. What remains is allocated to debt instalments, and once your existing debt obligations are taken into account the provider calculates the discretionary income left to meet any new debt. The table is in the regulation itself. A provider may on an exceptional basis accept lower declared expenses if a prescribed questionnaire is completed (23A(11)).

What documents will a provider ask for?

Regulation 23A(4) says the provider must take practicable steps to validate your gross income, as follows.

Regulation 23A(6) says you must accurately disclose all your financial obligations so the provider can do the assessment, and 23A(7) says you must provide authentic documentation.

If your income varies, 23A(5) means a single good month does not set the figure. The provider uses the average of at least the three pay periods before your application.

What must you tell the provider?

Section 81(1) says that when you apply, and while the application is being considered, you must fully and truthfully answer any requests for information the provider makes as part of its assessment.

Section 81(4) explains why that matters. It is a complete defence to an allegation that an agreement is reckless if the provider shows that you did not fully and truthfully answer its requests, and a court or the National Consumer Tribunal decides that your failure materially affected its ability to make a proper assessment.

So an incomplete answer can work against you in two ways. It can make an agreement unaffordable in practice, and it can weaken any later argument that the provider lent recklessly. The practical lesson is the plain one: list your debts, instalments and income as they are.

What happens if the assessment says no?

That is the provider's decision. Nothing in the sections cited here requires a provider to lend, and section 82 leaves the choice of model to the provider. Olvian cannot tell you why a provider declined or whether another provider would have approved, because we do not see or take part in the assessment.

If a provider declines, ask it to tell you the reason in plain terms. The right to challenge information held about you at a credit bureau is a separate right, which regulation 20 of the National Credit Regulations addresses. This guide has not set that regulation out, so check it or ask the National Credit Regulator.

If you feel an agreement was made without a proper assessment, section 136(1) lets any person complain to the National Credit Regulator about alleged reckless credit. Our guide on debt review and complaints covers that route, and the National Financial Ombud Scheme also handles credit complaints.

What does Olvian ask, and how is it different?

Our form asks how much you would like to ask for, what it is for (you can skip that), your work situation, your monthly income after tax, and your name, date of birth and mobile number. Registered credit providers use those details to see whether your request fits what they offer. It is not an affordability assessment, and nothing on it is a credit decision. Any assessment under section 81 is done by the registered credit provider that contacts you, using its own documents and checks.

Questions to ask when a provider calls

These are factual questions about how the process will work. They are not advice.

1. Are you a registered credit provider? Ask for the registration number. The National Credit Regulator keeps a public register.
2. What documents do you need from me, and by when?
3. Will you do a credit bureau check? What will it show?
4. How will you treat my income if it varies from month to month?
5. When will I receive the pre-agreement statement and quotation?

Our guide on the quotation and the agreement explains what comes next.

Sources

Checked on 31 October 2026. Olvian is not a credit provider or financial adviser and this guide is information, not advice.

• National Credit Act 34 of 2005, section 80: reckless credit
• Section 81: prevention of reckless credit
• Section 82: assessment mechanisms and procedures
• National Credit Regulations, 2006, regulation 23A: criteria to conduct affordability assessment
• Section 136: initiating a complaint to the National Credit Regulator
• National Credit Regulator: registers of credit providers and debt counsellors.