Johannesburg - Consumers are not honest about their expenses and will therefore obtain loans they cannot afford to pay off, a credit expert said on Wednesday."A lot of consumers do not write down their expenses and there is no scientific method of getting this. Sometimes people thumbsuck," said National Debt Mediation Association CEO Magauta Mphahlele."Sometimes, because they want the loan, they will under-declare their expenses just to secure the loan from the credit provider."When a consumer did this, the loan concerned could not be declared reckless, because the consumer was dishonest.Mphahlele was speaking on the sidelines of a credit and over-indebtedness summit in Midrand.She praised the National Credit Act (NCA) for bringing control to the amount of interest that credit providers could charge consumers.The NCA had made credit providers responsible for conducting affordability assessments before granting credit."Research has shown that credit providers are doing the assessment. If you look at the data, there is about [a] 45% rejection of credit applications," she said."That 45% then go and borrow money from loan sharks, friends and families."She said another loophole in the NCA was that the National Credit Regulator recorded only credit agreements, leaving out other kinds of debt such as child maintenance, some cellphone contracts and municipal debt.Recent data showed that South Africans had debt totalling R1.3 trillion.No cushion"What we are seeing is the lack of financial management. People do not save. If there is an emergency at home they have to go and borrow," said Mphahlele."People do not have a cushion. Say, if Eskom increases electricity by 16%, where are people going to get that extra money?"Mphahlele warned that the level of over-indebtedness was pushing the country's debt-to-income ratio to 77%, which was a bad sign.Moreover, consumers were not utilising the debt review process created under the new credit regulation environment.According to the NCR, nine million people had defaulted in their debt payment.However, since 2007, only 300 000 people had applied for debt review, Mphahlele said."People become over-indebted not because of borrowing, but sometimes its lack of financial management. They don't budget, they don't monitor their expenditure. They don't understand the cost of credit."