How Much Renovation Loan Can I Get In Singapore?
There comes a time when a homeowner decides it’s time for a home renovation.
Whether you want to improve your home’s aesthetic appeal or make it more functional, a renovation can make your home more comfy and enjoyable.
However, home renovations in Singapore can be quite expensive. And with other bills to pay, many people hardly have enough money to finance their renovation plan.
This is where renovation loans come in. In this article, you’ll learn about home renovation loans and other details like how much renovation loan can I get in Singapore.
How Do Renovation Loans Work In Singapore?
Renovation loans are a special type of loan that is meant specifically for financing your home renovation. You can apply for this type of loan from banks or HDB in Singapore.
The maximum loan amount you can borrow is $30,000 or six times your annual salary, depending on which is lower. Meanwhile, the loan tenure is between one to five years.
The interest rate for this type of loan is usually low compared to personal loans. The idea behind this is that banks know that you already own an asset and the loan will be used to improve the asset’s value.
But while you’ll enjoy lower interest rates, you’ll also have to face various restrictions with this type of loan.
For example, the loan amount is usually paid directly to the contractor that’s in charge of renovating your home. Also, there are certain restrictions on what type of renovation you can do.
What Can Renovation Loans Be Used To Pay For?
As mentioned earlier, there are some restrictions on what you can use a renovation loan to pay for. That said, the loan covers most of the renovation work you’ll do.
Here’s a list of what you can use this type of loan to pay for:
- Flooring and tiling
- Structural alterations
- Built-in cabinets
- Painting and redecorating works
- Bathroom fittings
- External renovation within the compound of the house.
What Should You Look Out For In A Renovation Loan?
The following are some of the details you need to look out for when applying for a home loan for renovation:
- Fees and charges: It’s important to look out for any fees associated with renovation home loans. This includes processing fees and legal fees. Some banks in Singapore will charge 1% of the loan amount as a processing fee while others don’t charge a fee for processing your loan.
- Interest rates: It would be wise to compare interest rates from different banks to find the best deal. You should keep on out for promotional interest rates that could help reduce the cost of the loan. For example, banks like OCBC offer lower interest rate for renovation loan to customers who go green in their homes.
- Repayment terms: Another thing you should check before taking a renovation loan is the repayment terms. This includes the loan tenure and whether there are any prepayment penalties. The normal loan tenure for renovation loans in Singapore is between one and five years.
- Eligibility criteria: It is also important to check if you meet the eligibility criteria for this type of loan. For example, you must earn a minimum income of $24,000 toqualify for a renovation loan in Singapore.
- Renovation limitations: As earlier mentioned, some renovation loans may have restrictions on the types of renovations you can make. This is why it’s necessary to read the fine print and find out what the restrictions are and if the loan is worth the hassle.
How Much Do Home Renovations Cost?
The total amount your home renovation will cost depends on the work you’re going to do, the materials used, and the contractor or interior designer hired.
For a basic renovation, such as painting and replacing flooring, costs can start around $5,000 to $10,000.
However, for a more extensive renovation like a full kitchen or bathroom remodel, costs can easily reach $50,000 or more.
It’s always a good idea to get quotes from different contractors or interior designers to compare costs. This will help you to have a clear budget in mind before starting a renovation project.
It’s also important to consider the long-term value of the renovation and how it will impact your property value. Are you planning to sell the home? If yes, then a renovation can increase the value of your flat.
How Much Renovation Loan Can I Get?
If you’re wondering how much renovation loan can I get, the maximum renovation loan amount you can get in Singapore is capped at six times your annual salary or $30,000, depending on which is lower.
If your renovation will cost more, you may have to find another way to cover the cost. Alternatively, you can reduce the cost by shopping for the items you need for your renovation yourself.
Best Renovation Loans In Singapore
There are several renovation loans available in Singapore, and the best one for you will depend on your needs and financial situation. Some of the best reno loan options in Singapore include:
- HDB renovation loan: This loan is specifically for homeowners who live in HDB flats and need to renovate their homes. The renovation loan for HDB is provided by HDB and has a low interest rate and flexible repayment terms.
- Home improvement loan: This loan is offered by several banks in Singapore and can be used for both minor and major renovations. The loan can be used for both HDB and private properties, and interest rates and terms vary depending on the bank.
- Personal loan: Some banks and Licensed money lenders in Singapore also offer personal loans that can be used for home renovations. Personal loans usually have a higher interest rate than home improvement loans but are often easier to qualify for
Here’s a list of some of the best renovation loans* currently available in Singapore:
- DBS Green Renovation Loan: This is one of the best renovation loans in Singapore. The annual interest rate is 3.88% of the loan amount for customers who go green. They charge a processing fee of $300 and the monthly repayment is $884.
- OCBS Renovation Loan: They charge an annual interest rate of 4.18% and a processing fee of $150. The monthly repayment is $888 and the minimum loan amount is $5,000.
- DBS Renovation Loan: This financial institution charges an interest rate of 3.88% of the loan amount. The processing fee is $300 and the monthly repayment amount is $888.
*Information correct at time of publishing
Get Up To $30,000 Renovation Loan In Singapore
Depending on how much renovation work your home needs, you can get up to a $30,000 reno loan from banks in Singapore.
Alternatively, you can get up to six times your annual salary as long as it’s not higher than $30,000.
Sometimes, it takes a long time for banks to approve loans in Singapore. And the eligibility criteria make it even more difficult for many people to access these loans.
At Horison Credit, we don’t believe you have to go through a lot of hassle to get a loan. This is why we offer a seamless loan application process and affordable interest rates.
You can apply for a loan to get your home renovation work started.