After going through the lengthy process of identifying a mortgage and purchasing the house of your dreams, the next thing is maintaining it in top condition. By this time, you are probably feeling the pinch after using savings for a down payment, and funding any major renovation is likely to be a challenge. One of the best options to access the funds you need is using an SG renovation loan.
This post is a comprehensive guide to renovation loans to help you answer the question, "What is the best way to get a renovation loan in Singapore?". We will also tell you a simple yet highly effective way of applying for a renovation loan through Lendela.
How Do Renovation Loans in Singapore Work?
Before looking at the process of applying for the best renovation loan in Singapore, it is important to start by understanding what a home renovation loan is. A renovation loan is a type of credit that provides homeowners access to the funds they need to renovate their homes. Note that although the loans are only available to homeowners, they are unsecured forms of credit, and no one will come for your home if you are unable to pay.
When you apply and your home renovation loan is approved, you can only use it to renovate the house. This means that prior to applying for the loan, an assessment to establish the required cash will be required. See, if your house has a problem with the roofing, a roofing contractor will assess the extent of the work and provide a detailed quote.
Because the credit is unsecured, banks rely on your credit score to determine your creditworthiness. If your credit score is low, your home renovation loan might be approved, but the interest rate will be higher compared to when the score would have been higher. Therefore, it might be a good idea to look at your credit score and ensure it is good to get the loan at a lower rate.
When to Go for Home Renovation Loans in Singapore
There are a number of reasons why you might need to go for a home renovation loan in Singapore, and here is a highlight of the commonest ones:
Roof Restoration or Repair
Whether you bought a new house or inherited an old one from your parents, the roof is one of the most exposed parts. The cooling and expansion of different sections of the roof can make the joints weak. Minor leaks can also weaken the roofing and progressively damage the support, resulting in crumbling.
To reduce the risk of roof damage, which can result in more serious issues, it is vital to have it repaired on time. Using a Singaporean house renovation loan, you will be able to give the house a lovely look and make spending more time there really enjoyable.
Renovation loans help you fix up your flooring. Think of it this way, how much pressure do your floors experience as you, family members, and friends walk around the house? The answer is "a lot," and it is likely to be even more when you factor in other heavy items, such as tables, refrigerators, beds, and ovens that are placed on it. This is one of the reasons why houses' floors get damaged within a very short, requiring regular repairs.
If you notice signs of damaged floors, it is advisable to have them repaired immediately before the problem becomes extensive. Using a renovation loan, it might also be a good idea to consider replacing the floor with a different type. In a house renovation loan, you can think of something to renovate that is more durable and stylish for your house.
Repainting Your Walls
Do you love painting the walls of your house? If there has been a considerable amount of time since the walls were last repainted, or you cannot actually remember when the painting was done, it might be a great idea to go for a renovation loan. When applying a new coat of colour, go for the high-quality type to help protect your house and give it a lovely outlook.
Electrical System Repairs
The electrical system is perhaps the most important part of any house because it powers all your appliances, from the refrigerator to the television. Therefore, if there is a problem with the electrical system, it is crucial to have it repaired professionally and urgently. However, these repairs can be expensive, and it is advisable to use a home renovation loan to address them.
Plumbing System Renovation
If your house's plumbing system is faulty, there is a risk it might affect the integrity of the entire structure. For example, leaking pipes can cause damage to the walls, loosen the paint on the wall, or cause short circuits in the electrical system. If the leak is too much, it can even result in flooding.
Instead of waiting for the plumbing damage to worsen because of a shortage of funds, it is advisable to get a renovation loan to fix it immediately. Most banks will be willing to offer a lending hand to make your home more enjoyable to live in.
Air Conditioning System Repairs
Located perfectly on the equator, Singapore is one of the best places on the globe to own a home. However, the temperatures can get high, and good air conditioning for your home would come in handy to keep everything cool. Therefore, if the air conditioning system is old or damaged and not functioning well, you can take out a house renovation loan in Singapore to get it fixed.
When Preparing to Sell Your House
Are you planning to sell your house and want it to attract the highest possible price? Well, the amount that interested clients are likely to pay depends on the state of the house, and you can raise it through some renovations. So, consider investing in a house renovation loan in SG to give the house a nice facelift before interested buyers start viewing it.
Special Benefits to Expect for Using Home Renovation Loans in Singapore
While it is true that there are a number of options which you can use to fund renovations, using a home renovation loan is one of the best options. One of the benefits of using this line of credit is that you get the cash to fund a major renovation and the repayment can be made slowly. Check our renovation loan calculator in Singapore. See – you get to enjoy staying in a lovely home and repay the money in instalments without causing significant financial pressure.
Other benefits of using house renovation loans in Singapore include:
Renovation loans in SG are approved fast to help you fix your home promptly.
The cash can only be used for house renovation. This implies there is no risk of getting tempted to divert the cash for other purposes.
No collateral, such as a house, car, or land, is required to get a home renovation loan approved.
You have the opportunity of enjoying low-interest rates if your credit score is low.
Crucial Things to Think About When Going for a Home Renovation Loan in Singapore
When considering a renovation loan, just like other forms of credit, it is prudent to take a moment to think about it because this is cash that must be repaid. Particularly, it is important to think of how it fits with other debts under your hood to avoid taking too much. So, in this renovation loan guide, we outline the main things that you need to think about when taking out a renovation loan.
Take a Moment to Think about Your Budget and Repayment Ability
For most people in Singapore, it is not uncommon to find them with a number of credits, such as personal loans and student loans. Therefore, it is important to think of how the renovation loan will affect your repayment capability. When considering your personal repayment ability, make sure to consider your entire budgeting, especially the following items:
The other types of debts that you pay every month.
Your regular expenses, such as rent, shopping, and food.
Money for college education, be it for yourself or dependents.
Regular utility bills for power, gas, and others.
Monthly savings to your emergency account.
Once you have listed all the above, ensure that the overall monthly debt payments do not exceed 30% of the monthly income.
The Interest Rate
The interest rate of a renovation loan is the cost of credit. When taking a loan, you want to go for the option with the lowest rate, but make sure to also think about the total payable amount because it factors in all the applicable charges. For example, if the home renovation loan has an administration fee, it will be factored into the total payable amount and not the interest rate. The best way to get loans with the best interest rates from top financial institutions is by working with a good loan comparison site, such as Lendela.
Personal Credit Score
As we mentioned earlier, renovation loans in Singapore are unsecured. Therefore, banks in Singapore look at the borrowers’ credit history to assess their creditworthiness and approve/ disapprove their loans. It is a great idea to start thinking about your credit score early, and here are some tips you can use to improve it:
Correct any errors that might be on your credit report.
Repay outstanding loans.
Improve your credit mix.
What Other Funding Options Do You Have?
Once a renovation loan is approved, you are required to start repaying in the subsequent month. Therefore, you might want to consider other funding options for renovation. For example, can you borrow from a close friend? What about your personal savings?
Only go for a renovation loan once other options, especially those that are interest-free, such as using personal savings, are exhausted. Remember that even when you use savings, the savings account should be replenished in the coming months to help cater for unexpected expenses that may arise along the way.
Comparing the Best Renovation Loans in Singapore to Personal Loans
For some people, a personal loan is a common alternative to renovation loans when it comes to restoring their houses back to top condition. So, let us compare the two:
The main similarity between a personal and a renovation loan in Singapore is that both are unsecured. This implies that neither of the two loans requires you to put up collateral. Therefore, your asset, be it a house or car, will not be sold to recover the cash if you are unable to pay.
Another similarity is that, like a renovation loan, the bank mainly checks your creditworthiness to approve or decline the personal loan application. Therefore, having a good credit score can come in handy in helping you enjoy lower interest rates.
The main difference between the two is that unlike a personal loan, which provides you with a free hand on how to use the borrowed cash, the renovation loan is tied to repairs. The bank will only release the cash to go to the renovation works. Therefore, you need to start deciding on the renovations that are required before the loan can be approved.
Apply for a Renovation Loan through Lendela
While the benefits that come with using a renovation loan in SG make it a worthy undertaking, the application process can be herculean. In a country where there are so many loan providers, narrowing down to the best one can take a lot of time. As if this is not enough, you will also be required to do a lot of paperwork before you are considered for a home renovation loan, but you can avoid this lengthy process by working with Lendela.
Lendela is a comparison site created to help simplify your process of loan application and provide you access to work with the best loan providers. To apply for a Singapore home renovation loan through Lendela, here are a few steps to follow:
Visit the Lendela website to make an application. This will only take a few minutes.
Get offers from multiple banks and financial institutions that are ready to provide renovation loans to you.
Lendela will assist you in picking the best deal and book you an appointment with the bank.
Sign the renovation loan.
This renovation loan guide has demonstrated that you can easily get a home renovation loan in Singapore to restore your home to the paradise of your dreams. Using Lendela makes the process even simpler because it only takes a few minutes to submit a home renovation loan application. Lendela will ensure that you get access to multiple banks and therefore have a higher chance of finding the best possible terms and conditions, such as low-interest rates.