Compare & Choose a Renovation Loan

Why Consider a Renovation Loan?

Owning a home is a major milestone in the lives of most people. But that’s not the end of the road. A few years after purchasing your home, the time may come when you’ll perhaps need to make certain improvements to your space. These improvements could be minor facelifts like retiling the floor and repainting the house, or they could be major home renovations like adding another section to your house.

Now, major renovations to your house can be very expensive, given the steep costs of materials and labor. While it may be a good idea to dig into your savings for minor repairs and facelifts, major home improvements could erode a huge portion of the money you’ve saved up. Here’s where home renovation loans in Singapore come to the rescue.

If you’re a homeowner looking for additional funding to carry out a major home renovation, then it’s a good idea to get to know all the details about renovation loans before you apply for one. So, without further ado, let’s get into the details.

Who Is Eligible for a Renovation Loan?

Before you apply for the best renovation loan in Singapore, you need to check if you are eligible for the funding. The exact criteria for eligibility may vary slightly from one lender to another, but broadly speaking, these are qualifying factors that you may be required to fulfil:

• You must be the owner of the property that you are planning to renovate – this is true for all kinds of properties like individual homes, condominiums, apartments, HDB or any other type of residential property

• You need to either be a Singaporean citizen or a Singaporean Permanent Resident

• You must be aged between 21 and 61 years of age to qualify for the loan

• You must also meet the requirements regarding the minimum annual income – most banks and lenders will require that you have a minimum annual income of $19,200 in order to obtain home renovation loans. However, in some cases this limit may be higher, coming in at $24,000 or $30,000.

• You must possess a decent credit score to be eligible for a home renovation loan

What Documents Are Needed To Apply for a Renovation Loan?

If you meet the qualifying criteria, the next step is to apply for the best renovation loan in Singapore. And when you apply for this kind of funding, you’ll be required to submit certain documents to the lender. Knowing what these documents are can help you get them ready on time, so the process of submitting a renovation loan application becomes smoother.

Generally, these are the documents that you’ll need to provide when applying for a home renovation loan:

• A copy of both the sides of your original National Registration Identity Card (NRIC)

• A statement of your contribution to the Central Provident Fund (CPF) for the 6 months preceding the date of your application

• Your most recent pay slip in a computerised format

• Proof that you are the owner of the property that is to be renovated

• An official quotation from the contractor handling your renovation project, complete with their stamp and signature

What Can a Renovation Loan Be Used For?

Some borrowings, like personal loans, can be used for a variety of purposes. But the best renovation loans in Singapore come with certain clauses attached, and they can only be utilised for a certain set of specific purposes.

Here’s an illustrative list of some of the things that the money borrowed through a in house renovation loan in Singapore can be good for:

1. Repainting the walls, interior surfaces, and exteriors of your home

2. Flooring and tiling works

3. Mending or redoing the electrical and wiring works

4. Carpentry works such as remodelling the kitchen cabinets, bedroom or wardrobes

5. Works related to the external components of the house, such as the roofing and fences

6. Standard bathroom fixtures and installations

At this point, it’s also important to make a note of some things that a renovation loan in Singapore cannot be used for. This kind of funding cannot be used to meet the costs of home furnishing (check our renovation loan calculator in Singapore). That includes the costs associated with the purchase of furniture like tables or cupboards, furnishings like curtains and linens, and other electrical appliances used around the house. Essentially, any expense that does not fall under the category of home improvement works cannot be funded using this product.

How Much Renovation Loan Can I Get in Singapore?

When considering the amount you can borrow for a renovation loan in Singapore, the maximum cap is $30,000 or six times your monthly income, whichever is less. If your renovation expenses exceed this limit, you have the option to secure two separate renovation loans or combine a renovation loan with a personal loan.

It's crucial to assess your financial readiness to manage the repayment obligations of both loans simultaneously, ensuring that you can comfortably handle the monthly installments without overstretching your budget.

What Are the Interest Rates Associated With Renovation Loans in Singapore?

There are a multitude of choices for home renovation loans in Singapore, with multiple banks offering the service at varying annual interest rates. Ultimately, it comes down to which bank you use, trust, and believe will give you the best bang for your buck. It is also important to keep the processing fees and monthly payments in mind as you need to pick a home renovation loan that you can afford to pay back.

Don’t be blindsided by the numbers, though, as it is vital you take the time to figure out which home renovation loan is best for you. Remember, you need to keep up with the monthly payments and must pay attention to the annual interest rate. The last thing you want to do is default on a payment and put your home renovation loan in jeopardy.

Conclusion

So, now that you know the basics about the best renovation loan in Singapore, you can shop the market to find the lender whose terms and conditions and interest rates best suit your needs (check out what is the cost of living in Singapore in 2021). To make comparisons like this easier for you, simply head over to Lendela’s online application and shop for the best renovation loan in Singapore for your home improvement project.

A Quick Comparison Between Renovation Loan and Personal Loan

A lower loan ceiling is one of the advantages that home renovation loans bring to the table. This helps keep renovation expenditures in check and at the right level. Also, in most cases, renovation loans come with insurance included in the package, so if anything happens to the borrower, the insurer takes care of the outstanding amount.