Are you looking to renovate your home and considering a renovation loan in Singapore?
Whether it’s a small kitchen upgrade or a complete repainting of the house, having a renovation loan can make all the difference in getting the job done without breaking into your savings.
But how much loan are you able to get for renovations?
Let’s discuss the best renovation loans in Singapore, the application process, and terms and conditions so you can better understand if taking up one is the right choice for you.
How Much Do Home Renovations Cost?
Home renovations can cost anywhere from $20,000 to $70,000, depending on the type and size of your renovation.
If you are going for minor upgrades or repainting, it can cost up to $25,000.
On the other hand, major renovations may cost you even $100,000 as they typically involve structural work and other additional costs.
Simply put, the more detailed or complicated the renovation is, the more budget it will require.
However, it is recommended that you get in touch with an architect (or designer) and related contractors to get an accurate estimate of your renovation costs. This will help you manage your finances better and allow you to apply for the right loan.
But how do home or HDB renovation loans work in Singapore? Let’s find out.
How Do Renovation Loans Work In Singapore?
In Singapore, homeowners can take up a renovation loan from banks or licensed money lenders.
Loan From Banks
Bank renovation loans typically come with lesser interest rates as compared to personal loans and come with a repayment tenure of up to five years.
Moreover, their interest keeps on reducing as you repay the loan because renovation loan interest rates are calculated based on the outstanding amount and not on the principal amount.
So as you make monthly repayments, you reduce your debt and the interest rate simultaneously.
Application Process:
- Get a quote for your desired home renovation tasks from a contractor.
- Visit the bank of your choice and apply for the loan.
- Submit the required documents along with your application form.
- Wait for the bank’s decision.
- Once approved, the bank will disburse the loan amount directly to your contractor.
Documents Required:
- NRIC
- Latest IRAS Notice of Assessment
- Latest payslips for the last three months; or the last 12 months’ CPF contribution history statement
- Stamped and signed quotation from the contractor
- Proof of ownership of the property to be renovated
Eligibility Requirements:
You need to be:
- A Singapore citizen or Singapore permanent resident
- Between 21 to 65 years old (maximum age limit varies across banks)
- Earning at least $24,000
- The property owner or a related family member who has the owner’s consent
From Licensed Money Lenders
Licensed money lenders usually ask for the same documents when you apply for a renovation loan. However, they are more flexible when it comes to terms and conditions and the usability of the loan amount.
For instance, you can get a reno loan even with a low income and a bad credit score.
Similarly, you can also be more flexible with using the loan amount.
Now, if you’re wondering, “ How much renovation loan can I get?” Here’s the answer.
How Much Renovation Loan Can I Get?
In most cases, the renovation loan amount depends on what the contractors have quoted you.
For instance, if a contractor has quoted you $12,000 for minor repainting and woodwork tasks, the bank won’t give you more than that.
However, the bank also won’t give you uncapped loan amounts. Every bank has its own regulations, but most banks have capped loan amounts at $30,000 or six months of your salary, whichever is lower.
But what if you need more than that?
Well, you can apply for two separate loans with all required documents duly filled and signed.
This also means that you need to plan your renovation tasks beforehand to ensure that the total cost of your renovation is within the loan amounts you can get.
What Can Renovation Loans Be Used To Pay For?
A home loan for renovation can’t be used for furniture, electrical appliances, mattresses, luxury fittings, or decorative accessories like curtains and carpets.
However, it can be used to pay for the following:
- Structural repairs
- Repainting or plastering
- Flooring and tiling
- Carpentry work
- Plumbing, electrical, and air conditioning works
- Basic bathroom fittings
- External repair works within house premises like the roof, balcony, or compound walls
What Should You Look Out For In A Renovation Loan?
When you are looking for a renovation loan in Singapore, make sure to pay attention to the following:
- The interest rate offered by the bank
- The repayment tenure offered by the lender
- Processing fees and other charges
- Any additional perks or benefits that come with the loan
The best way to find the right loan for your needs is to compare offers from different banks. Make sure to compare the loan terms, interest rates, and other fees and charges before making a decision.
Finally, read through the fine print and make sure you understand all the terms and conditions associated with the loan. This way, you can be sure that you are getting a good deal.
Here are some popular renovation home loans:
Best Renovation Loans In Singapore
Some of the best home renovation loans you can get from banks in Singapore are:
- DBS Renovation Loan
- OCBC Renovation Loan
- CIMB Renovation i-Financing
- HSBC Personal Loan
All of these loan options come with almost similar terms and conditions, but HSBC offers the lowest interest rate (3.7%). However, the bank requires you to earn at least $30,000 per year, which is slightly higher than the rest ($24,000).
If you’re not sure about which loan to choose, it’s best to speak with a financial advisor who can provide you with more details on the best loan for your needs.
Most Convenient and Hassle-Free Renovation Loan Option
Getting a renovation loan in Singapore can be a great way to finance your home improvement projects.
However, bank renovation loans can be rather complicated and strict both in terms of application and usage.
This is where a licensed money lender like Lending Bee can be helpful. Besides lenient eligibility requirements, you get to choose how you spend the money.
Unlike bank loans, you can spend a money lender’s loan amount on buying furniture, decorative accessories, or household appliances.
Apply for a loan today and make your home more comfortable and stylish – just the way you want.
About Ashley Sim
Calling herself a “professional multi-tasker”, Ashley worked as a relationship manager in a bank for five years. She left her job just before the pandemic happened and became a freelance writer for about a year. Now, she’s making the most of her love for writing and knowledge of the banking and financial industry in her role as a content marketing lead. She hopes to help people make better financial decisions through her content and campaigns.
