Renovation Loan Checklist: 5 Things to Check Before You Apply

Renovating your dream home is fun. Financing it is where you need a checklist.

This guide covers 5 things to verify before you apply: eligibility criteria, loan tenure, monthly repayments, fees (including insurance premiums where applicable), and documents (including tax notice of assessment).

If you want to compare personalised offers quickly, start here: compare renovation loan options on Lendela.

A closer look at home renovation loans in Singapore

A home renovation loan is an unsecured form of credit advanced to homeowners to help them increase the value of their property. So, you do not have to worry that a lender in Singapore will come and sell your house if unable to repay. However, this should not make you put less effort on paying the loan because there are serious dangers that come with it, such as damage to your credit score.

Advantages of using home renovation loans

When you take a renovation loan, the main advantage is that it comes with a lower interest rate than personal loans. It also comes with a long tenure of one-five years, depending on the lender. So, once the renovation loan is approved, the repairs are completed right away by the selected contractor and the payment made on a monthly instalments for the entire loan term.

Unlike a personal loan where the lender releases funds to your personal bank account, the renovation loan is different. To reduce the temptation of borrowers directing funds to other areas, the money is only released to the contractor who is undertaking the renovation work. The selected lender might also conduct site visits to confirm that the renovation work is ongoing as planned.

Because you are borrowing to renovate the home, the loan is a great way to allow the homeowner to take credit for the value of his/her house. If the actual value of the house is $500,000 but will be worth $650,000 after renovation, you get the attachment to the additional value. For a person who might want to sell the house in the future, this can be a great addition to help increase the price tag and attract buyers fast.

How does home renovation loan compare to line of credit?

One of the options people in Singapore consider when thinking of home renovations is a home equity loan. This is a type of credit that allows the homeowner to borrow against the equity of his/her property. However, you are required to downsize the value of the project if the home equity is not enough or fund the balance. In most cases, people who have stayed for more than ten years in their homes might not have issues using home equity loans, but this might not be the best option for recent home buyers.

What kind of renovations can you do with a renovation loan?

There are a number of renovation works that you can do with the loan, but they have to be well detailed by a contractor. This implies that even before making an application, a contractor should have assessed the work. So, here are some of the renovation tasks that can be done with home renovation loans.

Structural alterations

These are major renovation tasks that target giving the home a completely new face. For example, you might want to redesign the living room by extending it to include a small library section. These are structure alterations, and they can increase the value of the house with a significant margin (all about renovation loan calculator in Singapore).

Electrical and wiring works

If you notice that the house's electrical system is getting old or outdated, it will be a good idea to have it fixed. Indeed, this is crucial to ensure your home is safe for your family. To determine whether there are wiring tasks that need to be done, check for things such as hanging cables, loose connections, and regular failures.

Extension works

Do you feel that your home can be a lot better with an extension? This can be something such as a patio, verandah, garage, or creating a new room if space allows. If you are innovative, extensions can even help to generate some income for you. For example, you can extend the house with several rooms and let them. See, the cash can serve as an additional stream of revenue or help with loan repayment.

Flooring and tiling

Floors, especially the high traffic areas of your home, can get damaged pretty fast. So, whether the floor has become loose or faded because of regular tramping, you can use funds from a renovation loan to repair or replace it.

These are only a few activities that you can use a home renovation for. Others include carpentry, painting works, bathroom fittings, installation of a new solar system, and basement jobs. However, you need to note that renovation loans are not allowed for tasks such as paying for artwork, smart devices, household appliances, and curtains.

Five things to look for in a home renovation loan

Now that you know what a renovation loan is and how it works, are you ready to apply for one? If the answer is “yes,” it is important to start by thinking about the following five things.

1. Monthly repayments (affordability, not just the rate)

Start with monthly repayments. If the instalment doesn’t fit your cashflow, no “promo rate” will save the deal. A practical way to assess affordability is to decide what monthly amount you can sustain, then work backwards to a loan tenure (repayment period) that keeps you comfortable even in “high expense” months.

Keep it simple:

Shorter repayment period → higher monthly repayments, lower total interest
Longer repayment period → lower monthly repayments, higher total interest

If your renovation spend is currently sitting on a credit card, prioritise a plan to stop revolving interest from compounding. Use Lendela to understand your instalments and sanity-check your affordability: estimate your monthly repayments on Lendela.

2. Fees and insurance premiums (what changes the real cost)

Rates are only one part of cost. For a clean comparison, check the fees that can quietly change what you actually pay.

Common fee items to verify:

Processing/admin/handling fees
Late payment charges
Early repayment/redemption charges (if you might clear early)
Contract variation fees (e.g. changing repayment date or tenure)

Also look out for insurance premiums where applicable. Some packages include a premium component that affects the disbursed amount or total payable. The decision-grade metric isn’t “lowest headline rate”; it’s total payable amount over the same repayment period.

3. Eligibility criteria (including minimum age 21 years)

Eligibility criteria differ by institution, but most share a similar baseline. Common checks include:

Minimum age (often at least 21 years)
Residency status (policies differ)
Property ownership/proof of renovation scope (via quotation/contract)
Minimum annual income and employment stability
Existing obligations and credit profile

If you’re borderline on eligibility, the most common improvements are: reduce requested amount, choose a repayment period that keeps monthly repayments sustainable, and submit complete supporting documents.

4. Loan tenure and repayment period (how long you’ll be paying)

Loan tenure (repayment period) is not a minor detail – it drives both your monthly repayments and your total cost. In Singapore, renovation-specific facilities commonly sit within a shorter tenure range than general unsecured borrowing (often up to 5 years, subject to policy).

A practical approach:

Compare the same amount across 2–3 tenures (e.g. 24 vs 36 vs. 60 months)
Pick the shortest repayment period that keeps monthly repayments sustainable
Check whether early repayment charges apply if you think you may clear early

The “best” tenure is the one you can stick to without missing payments – consistency beats ambition.

5. Documents and proof (quotation + tax notice of assessment, where applicable)

Approval timelines usually come down to documentation. Most institutions will ask for proof of both income and renovation works.

Typical documents include:

NRIC (front/back)
Income proof (e.g. payslips/CPF contribution history)
Tax notice of assessment (IRAS NOA), where applicable
Contractor quotation/renovation contract
Property ownership proof (if required)
Permits (e.g. HDB/MCST), where applicable

If you’re searching for an instant loan, manage expectations: end-to-end “instant” is rare when quotations and documents must be verified. The fastest approvals usually happen when documents are complete on first submission. For the full checklist + timelines + repayment examples, see Lendela’s renovation loan guide.

How to keep the cost of renovation low

Let us face it: renovating your home to look like that dream holiday destination in the Mediterranean holiday homes can cost a lot. Sure it is good, but you need to appreciate the importance of only spending what you can afford. So, here are some useful tips to help you keep the cost of renovation low:

Compare what different contractors are charging and go with the affordable one.
For every renovation task, there is likely to be a cheaper alternative. For example, you might want to overlay the floor with tiles as opposed to redoing it.
Think about the materials that you want to use. Sure, there are pretty expensive faucets for all the bathrooms in the house, but you can do with cheaper ones.
Is a new extension for your home vital? Instead of building a new concrete wall to create a home library, why not consider partitions. They will still serve the purpose.

Personal loan vs. renovation loan: how to apply for a home renovation loan in Singapore

As you can see, a renovation loan can come in handy to help convert your home into the paradise of your dreams. However, applying for a loan can be pretty challenging in Singapore because of the long list of lenders. "Do I apply from a bank or licensed financial institutions?" many people in Singapore ask.

Instead of taking a lot of time, perhaps days or months, trying to check the details of each lender, why not work with lender comparison sites? One good example is Lendela, a company dedicated to making loan applications easy, fast, and straightforward. Here are the main steps of applying for loans using Lendela:

Visit Lendela website to make a short application. Unlike with other applications that can take you much time, only a few minutes are required at Lendela.
Get offers from different lenders. Once your application is made, it is submitted to different lenders, who check and give their offers.
Check the offers and identify the one with the best conditions. Lendela will also come in handy to help you with this. Then, you will be booked for an appointment with the lender.
Sign the renovation loan agreement, and the money is released to your contractor. At this point, there is nothing that can stop you from turning your home into a paradise!

Conclusion

If you have renovation works to complete at home, the smart way to handle them is using renovation loans. As we have demonstrated in this post, the loans are only available to homeowners and come with low-interest rates.

Remember that if you do not qualify for a renovation loan, it is also possible to use a personal loan to fund the renovation job. Again, ensure to borrow what you can repay comfortably and stick to the agreed repayment schedule.