Want to repair your home or switch up its look but your cash balance doesn’t fit your fantasy? A home renovation loan may be all you need to flip the switch.
Now you may be asking a couple questions: “how much renovation loan can I get?”, “what are the interest rates like?” and “do I even qualify?”.
This is pretty normal, after all, home renovation loan arrangements can sometimes appear tricky. But they are not.
In this article, we take a look at how a home renovation loan works, how much loan you can get and other relevant questions to guide your decision.
Renovation loans serve to finance your home renovations. In Singapore, this loan is typically quoted at a monthly rest rate, meaning your interest rate is calculated based on the loan’s outstanding balance.
Low and effective interest rates are attractive attributes of renovation compared to personal loans, which are quoted at a flat rate with interest payments calculated based on the original loan amount.
Keep in mind that a renovation loans differ from home loans which you can take out to finance your mortgage.
HDB or banks may offer a home renovation loan to eligible individuals. And because it’s a special loan, there are restrictions on what you can use the renovation loan sum to pay for, and the money is typically disbursed to the contractors.
Banks may demand extra fees if you want your loan disbursed to several suppliers or in instalments.
It would help to get familiar with the terms and conditions of the renovation loan and ascertain whether there are administrative, handling or processing fees.
If you’ve ever found yourself asking questions like “how much renovation loan can I get?”, “what can you do with a renovation loan?” and “how much do I need?”, the following sections will offer the insight you need.
When people ask, “how much renovation loan can I get?”, they often do so to determine whether the loan sum will suffice to cover their renovation needs. However, there are restrictions on what renovation loans can be used for.
Despite their restrictions, renovation loans have extensive usage and cover the major renovation works.
The list below highlights the different works you can execute with a renovation loan:
Please keep in mind that this list varies across banks and money lenders, and it would help to verify a prospective bank or licensed money lender allows what you’re seeking the renovation loan for.
Most people are quick to ask, “how much renovation loan can I get?”, forgetting that renovation loans can get tricky and you need to consider certain factors before taking out such a loan.
So, here are essential factors to keep in mind when seeking a renovation loan.
It always helps to avoid home renovation loans with high interest rates to avoid plunging into huge debt.
Do well to shop around potential banks or licensed money lenders, compare rates and select the ones that best suit your finances.
It is essential to take note of the late payment fee amount and other charges you can incur from renovation loans.
Paying on time and in full excuses such liability, but entering loan arrangements within your capacity is always a smart choice.
Take your time, assess the renovation tasks you need a loan for, and conclude on a definite budget.
High-amount renovation loans do not only leave you with spare cash, you will also pay interest on the money you do not need.
Keep an eye out for promotions and discounts when shopping for the best renovation loans.
You may put a call through to potential banks or money lenders to find out possible offers. You put questions like, “how much renovation loan can I get if I take up this offer?” or “when can I possibly get a discounted loan offer at your office?”, if your renovation work can wait.
Consider these factors and there’s a high chance you’ll get the right renovation loan offer for you.
There is no one-size-fits-all approach to determining home renovation costs. It depends on the scale and aesthetics of the renovation.
A renovation loan can range between $20,000 for a basic renovation of a 3-room flat to over $100,000 for a tastefully renovated 5-room flat.
However, factors like the per sqm of the room will also determine the ideal loan sum to opt for. The larger the room, the higher your loan sum.
Fitting, fixtures, materials, and workmanship fees also impact your evaluation in no small ways.
Remember that the style you’ve chosen when redesigning your home has a significant bearing on your estimates.
For example, the average renovation cost for a vintage style design ranges between $60,000 to $75,000, the Scandinavian style hovers around $65,00 and $90,000 on average, and the traditional style may cost between $40,000 and $75,000.
Property size, level of expertise at every level, type of work needed and the grade of materials to buy can help determine your estimate for a home renovation loan.
The maximum amount for a renovation loan is $30,000 or 6 times your monthly salary, whichever is lower. By implication, if your home renovation cost is $50,000, you’re $20,000 short.
In some cases, you may be allowed to borrow the actual loan sum you’re demanding, but the interest rates in those cases are much higher and may severely impact your Total Debt Servicing Ratio.
If you’ve been asking, “how much renovation loan can I get”, remember that the maximum benchmark of $30k or 6 times your monthly salary may be your safest option.
The best renovation loans in Singapore are CIMB Renovation Loan, DBS/POSB Renovation Loan and Maybank Home Renovation Loan.
Here, the interest rate is 3.88% (EIR 4.295), and the loan tenure is 1 to 5 years. You’ll be charged 1% of the approved loan for processing, admin and handling fees.
The maximum loan amount you can get is up to 30,000 or 6 times your monthly salary, whichever is lower. The minimum annual income of the borrower is $24,000.
The interest rate for this loan is 4.18% (EIR 4.91%) for a loan tenure between 1 to 5 years. You can also get a 3.88% (4.62%) interest rate on the DSB/POSB Green Renovation Loan.
You will pay 1% of the approved loan for processing, admin and handling fees and the maximum loan amount is $30,000 or 6 times your monthly salary, whichever is lower. Like CIMB, the borrower’s minimum income should be $24,000.
For a loan tenure between 1 to 5 years, Maybank Home Renovation Loan pegs its interest rate at 3.88% for existing home loan customers and 4.98% for new applicants.
It charges 0.5% for processing, admin and handling fees, and the maximum loan amount is $30,000 or 6 times your monthly salary, whichever is lower. However, you must have an annual income of $30,000.
Still wondering and asking, “how much renovation loan can I get? Then, it may be time to switch up your home with 1AP Capital.
1AP Capital offers simple, fast and effective home renovation loans with moderate interest rates and repayment structure that makes you enjoy your beautiful home without worry or stress.
Whatever your queries are: “how much renovation loan can I get?”, “what are your interest rates like?” or “do I even qualify?”….