We report the discovery and characterization of a new M-dwarf binary, with component masses and radii of , , , , and orbital period of ∼4.1 d. The M-dwarf binary HATS551−027 (LP 837−20) was identified as an eclipsing binary by the HATSouth survey, and characterized by a series of high-precision photometric observations of the eclipse events, and spectroscopic determinations of the atmospheric parameters and radial velocity orbits. HATS551−027 is one of few systems with both stellar components lying in the fully convective regime of very low mass stars, and can serve as a test for stellar interior models. The radius of HATS551−027A is consistent with models to 1σ, whilst HATS551−027B is inflated by 9 per cent at 2σ significance. We measure the effective temperatures for the two stellar components to be T_{eff, 1} = 3190 ± 100 K and T_{eff, 2} = 2990 ± 110 K; both are slightly cooler than theoretical models predict, but consistent with other M-dwarfs of similar masses that have previously been studied. We also measure significant H α emission from both components of the binary system, and discuss this in the context of the correlation between stellar activity and the discrepancies between the observed and model temperatures.