A Gauteng High Court ruling this week ordered the City of Ekurhuleni to permit residents evicted from the N12 informal settlement to return and rebuild their structures. The decision highlights a difficult reality for thousands of South African households: when housing costs Ekurhuleni families face exceed what they can afford, many have no choice but informal shelter—and any disruption to that arrangement can trigger immediate financial crisis.
For the families affected, the eviction wasn't just about losing a roof. It meant scrambling for emergency accommodation, often at inflated short-term rates. It meant missing work. It meant children out of school. And for many, it meant turning to credit—personal loans, stokvels, or high-interest lenders—to cover the gap.
We see this pattern often. Housing instability doesn't stay contained to rent or bond payments. It ripples through every line of a household budget.
Why housing costs Ekurhuleni residents struggle with keep climbing
Ekurhuleni is home to more than three million people, many of whom earn modest incomes in manufacturing, services, or the informal economy. Rental costs in established areas have climbed steadily, while the waiting list for subsidised housing stretches into the hundreds of thousands. That leaves a growing number of families with three bad options: pay more than they can afford, move further from work, or settle informally.
Informal settlements offer proximity to jobs and schools without formal rent, but they come with their own costs—transport to fetch water, paraffin or electricity from pre-paid meters, and the ever-present risk of eviction or fire. When an eviction happens, those hidden costs become very visible, very quickly.
The financial shock of sudden displacement
Say you're a family of four in Benoni, living in an informal structure near your workplace. Your monthly budget is tight but manageable. Then, overnight, you're told to leave.
You might pay R80 a night for a backyard room while you figure out what's next—that's R2,400 a month, more than many formal rentals, with no security of tenure. You might borrow from family or take out a small personal loan to cover deposits, transport to a new area, or replacing belongings lost in the move. Meanwhile, you're still expected to show up for work, pay for school fees, buy groceries.
This is where households often make decisions they later regret: taking credit they can't truly afford, missing other payments to cover the emergency, or falling behind on existing debt.
How housing instability drives borrowing
In our experience, housing emergencies are one of the most common reasons South Africans apply for personal loans. The need is real and urgent. But it's worth pausing to ask whether borrowing will solve the problem or simply shift it.
A loan can bridge a short-term gap—first month's rent, a deposit, moving costs—if you have a clear plan to stabilise your housing and income within a few months. But if the underlying issue is that housing costs Ekurhuleni families face are structurally out of reach, a loan may just add another monthly obligation you can't meet.
Questions to ask before borrowing for housing costs
- Can I afford the monthly repayment on top of my new rent or bond?
- Am I borrowing to cover a one-off expense (like a deposit), or to pay ongoing costs I can't actually afford?
- Do I have a realistic path to stable housing within the loan term?
- Have I explored all other options—family support, employer assistance, municipal programmes, NGOs?
If the answer to the second question is yes, or the answer to the third is no, credit is probably not the right tool. It might feel like the only option, but adding repayment pressure to an already unaffordable situation often makes things worse.
Borrowing to cover a housing emergency can help—but only if the emergency is temporary and you have a credible plan to get back on your feet. If the gap between your income and housing costs is permanent, debt won't close it.
Where to look for support during housing transitions
If you're facing eviction, displacement, or a sudden jump in housing costs, there are a few avenues worth exploring before turning to credit.
Municipal housing assistance
The City of Ekurhuleni operates a housing demand database. If you qualify for a government subsidy (household income below R3,500 per month), register on the database and keep your details up to date. While waiting lists are long, being on the list is the first step. Contact the Ekurhuleni housing department or visit your nearest municipal office.
Employer programmes
Some larger employers offer housing allowances, salary advances, or partnerships with rental agencies. If you're facing a housing crisis, speak to your HR department—many companies would rather help a valued employee stay stable than lose them to financial stress.
Non-profit and community organisations
Organisations like the Socio-Economic Rights Institute (SERI), Lawyers for Human Rights, and local advice centres often provide free legal support for eviction cases or help navigating housing rights. Community advice offices in Ekurhuleni can also connect you to emergency accommodation or social grants you might not know you qualify for.
Negotiating with landlords
If you're renting formally and costs have jumped beyond what you can manage, try negotiating before you fall behind. Many landlords would rather accept lower rent for a few months than go through the eviction process and hunt for a new tenant. Be upfront, propose a realistic amount, and put it in writing.
Managing your budget when housing costs jump
Whether you've been displaced, face a rent increase, or are moving to a new area, a sudden rise in housing costs forces tough choices. Here's how to regain control without derailing your finances entirely.
Separate essential from negotiable spending
Write down every rand you spend in a month. Divide it into three columns: fixed essentials (rent, transport to work, school fees), variable essentials (food, electricity, water), and discretionary (airtime, entertainment, take-aways). When housing costs jump, discretionary spending has to shrink first—sometimes to zero.
Revisit transport and location trade-offs
Moving further from work might lower rent, but if your taxi fare doubles, you haven't saved anything—you've just moved the cost. Calculate total monthly expense (rent + transport + time) before committing to a new place. Sometimes paying R500 more in rent to stay close to work saves you R800 in transport and three hours a day.
Avoid the debt spiral
Taking one small loan to cover a deposit is manageable. Taking three loans from different lenders to cover rent, transport, and groceries each month is a spiral. If you're already borrowing to pay for last month's basics, adding more credit won't fix it—it will compound the problem. Seek advice from a debt counsellor registered with the NCR before taking on more.
What to do if you're already behind on repayments
If a housing emergency has left you unable to meet your existing loan or credit commitments, act quickly. Ignoring the problem makes it worse and limits your options.
Contact your credit provider immediately. Explain your situation and ask about payment arrangements—many registered lenders, including Spring Loans, would rather work out a realistic repayment plan than hand your account to collections. You may be able to reduce payments temporarily, extend the term, or pause payments for a month while you stabilise.
If you have multiple debts and can't keep up with all of them, consider debt review (debt counselling). A registered debt counsellor will negotiate with all your credit providers on your behalf, consolidate your payments into one affordable monthly amount, and provide legal protection from further legal action. It does affect your credit record, but if you're already missing payments, your record is affected anyway—and debt review gives you a structured path out.
Your rights during eviction
The Prevention of Illegal Eviction from and Unlawful Occupation of Land Act (PIE Act) protects occupiers—whether you rent, own, or live informally—from eviction without a court order. Even if you're behind on rent or living in an informal settlement, you cannot be removed by force without due process.
If you receive an eviction notice, get legal advice immediately. You have the right to oppose the eviction in court, and the court must consider your circumstances, including whether alternative accommodation is available. Community legal clinics and organisations like SERI provide free assistance.
Thinking longer-term about housing affordability
Short-term fixes—a loan, a temporary room, staying with family—can get you through a crisis. But if the gap between what you earn and what housing costs in Ekurhuleni is structural, you need a longer-term strategy.
That might mean retraining for higher-paying work. It might mean starting a side income—many people in informal settlements run small businesses (spaza shops, hair salons, repairs) from home to supplement wages. It might mean pooling resources with extended family to afford a larger, more stable place together.
It almost certainly means getting your credit record and budget into the best possible shape, so that when an opportunity does come—a better job, a housing subsidy approval, a lease you can afford—you're ready to take it.
Frequently asked questions
Can I get a personal loan to pay a rental deposit in Ekurhuleni?
Yes, many South Africans use personal loans to cover rental deposits or first month's rent when moving. Before applying, make sure you can afford the monthly loan repayment on top of your new rent. It's also worth asking the landlord if they'll accept a split deposit or a guarantor instead, which avoids taking on debt.
What happens to my credit score if I'm evicted?
Eviction itself doesn't appear on your credit report, but unpaid rent or broken lease agreements do. If your landlord hands the debt to a collection agency or takes you to court and obtains a judgment, that will damage your credit score and make it harder to rent or borrow in future. If you're facing eviction, try to negotiate a settlement with your landlord before it reaches that stage.
How long does it take to get RDP housing in Ekurhuleni?
Waiting times vary widely depending on your ward, household income, and how long you've been on the database. Some applicants wait five years, others more than ten. The only way to improve your chances is to register early, keep your contact details updated with the municipality, and apply for every available programme (including rental assistance and upgrading of informal settlements).
Can I apply for a home loan if I live in an informal settlement?
Standard home loans require proof of income, a deposit, and a property with formal title. If you're living informally, you're unlikely to qualify for a bond in the traditional sense. However, some government programmes and specialist lenders offer incremental housing finance or serviced-stand loans. Start by improving your credit record, building savings, and registering for municipal housing programmes.
What should I do if I borrowed money for rent and now can't repay?
Contact your lender as soon as you realise you'll miss a payment—don't wait until you're already in arrears. Explain your situation and ask about a payment plan or temporary arrangement. If you have debts with multiple lenders and can't keep up, speak to a registered debt counsellor. Ignoring the problem will lead to default, collections, and legal action, which makes everything harder.
This article is for general informational purposes only and is not financial advice. Spring Loans is a registered South African credit provider — please speak to a qualified financial adviser or registered credit provider before making borrowing decisions.
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