How Much Renovation Loan Can I Get In Singapore?
February 2, 2023
After a long, hard day at work, can you imagine coming home to a tastefully decorated abode – done just the way you like it?
These days, homeowners like yourself love having some creative control over their homes. They willingly pay to add aesthetic value to their HDB flat or private property.
However, it’s a different story if you have a cashflow problem that makes covering all the renovation costs challenging, especially if you have prior financial commitments. This is when getting a home loan for renovation becomes essential.
You may be asking “how much renovation loan can I get?” The amount you can borrow depends on several factors, such as the extent of renovation you require.
Here is a guide to help you understand how a reno loan works, how to find a home loan for renovation, how much you can borrow, and more.
How Do Home Renovation Loans Work In Singapore?
A renovation loan helps you renovate your home. It usually has a lower effective interest rate (EIR) than a personal loan.
When you qualify for a home loan for renovation, the lender doesn’t disburse it into your account. Instead, it will go directly to your contractor or interior designer.
There may also be site visits conducted by the lender to ensure that the loan is not being used for other purposes.
What Can Renovation Loans Be Used For?
Before you ask your financial advisor “how much renovation can I get?”, you should first understand how you can use this loan.
You can cover the cost of the following:
- Flooring and tiling
- Electrical and wiring work
- Built-in cabinets and other carpentry work
- Bathroom fittings
- External works within your home compound (e.g. your balcony)
What Should You Look Out For In A Renovation Loan?
When comparing home renovation loans from different lenders, look for the following:
Interest rate: The interest rate for a renovation loan varies from one lender to the other. You should shop around and compare loan offers before you decide which loan to go for. This will help you to get the best reno loan.
Fees and charges: When taking out a loan, there will be fees involved, such as the processing fee, which is 1% of the approved loan amount. You can also be charged for late payment or early payment. Be aware of such fees before you sign the loan contract.
Maximum loan amount: How much can you borrow to renovate your home? Consider if the maximum amount will cover the renovation work you need.
Ongoing promotions: A renovation loan with a promotion can help you pay significantly less.
How Much Do Home Renovations Cost?
When you want to renovate your home, it is crucial to determine how much you will need before the project commences.
Generally, it can cost you $20,000 to $70,000, depending on several factors. They include:
Project Size And Type
Do you want to renovate your entire home or just the flooring or the balcony? The larger the space you want to remodel, the higher the cost.
Also, are you renovating a buy-to-sell or a home you want to live in for good? If you want to renovate a home that you will sell, you shouldn’t spend a lot on it.
However, if it is your forever home, you can consider paying more since you’ll be living there for your lifetime.
Materials To Use
The cost of materials used in renovation heavily influences the total cost. You can compare the prices of affordable and premium materials from various suppliers to get the best deal.
Contractors And Designers Involved
As you ask “how much renovation loan can I get?”, you should consider the designers and contractors you will use. Their prices vary depending on their level of expertise.
Renovation Work Required
Some tasks can be more costly than others. Renovation work, such as designing and implementing a design, requires more personnel, which is more expensive.
Current Condition Of Your Home
A HDB flat in good condition will need less renovation. This lowers the cost as compared to one in a bad state.
How Much Renovation Loan Can I Get?
After knowing the cost of your home renovation, you can ask yourself “how much renovation loan can I get?”
The maximum renovation loan for a HDB that you can get in Singapore is $30,000 or six times your monthly salary, whichever is lower.
What if you need more than this amount for your renovation cost? You can take out two renovation home loans or apply for a renovation and a personal loan.
However, you should be willing and able to commit to paying the monthly installments for both loans.
Also, before considering multiple loans, you need to check your Total Debt Servicing Ratio (TDSR).
The TDSR helps you determine how much debt you can commit to service per month. In Singapore, your TDSR, including your reno loan, should not exceed 55% of your monthly income.
Best Renovation Loans In Singapore
Are you looking for the best renovation loan?
Here is a table of the best renovation loans in Singapore from different lenders that you can consider:
|Interest rate||Loan Amount||Loan Tenure|
|CIMB Renovation Loan||3.88% (EIR 4.29%)||Up to $30,000 or 6x your monthly salary, whichever is lower||One to five years|
|DBS Renovation Loan||3.88% (Flat EIR)||Up to $30,000 or 6x your monthly income, whichever is lower||One to five years|
|OCBC Renovation Loan||4.18% (EIR 4.80%)||Up to $30,000 or 6x your monthly salary, whichever is lower||One to five years|
|Maybank Home Renovation Loan||3.88%||Up to $30,000 or 6x your monthly income, whichever is lower||One to five years|
|Licensed Money Lenders||1-4% monthly interest rate||Up to $30,000 or 6x your monthly incomes, whichever is lower||Six to 12 months|
Find The Best Home Renovation Loan In Singapore
Your home often reveals your personality. Hence, living in a beautiful environment is crucial.
However, do you have the money to renovate your home? With the best renovation loans Singapore, you can transform your home to your taste.
But you could be asking “how much renovation loan can I get?” You can borrow a maximum of $30,000 or six times your monthly income, whichever is lower. However, some factors, such as the TDSR, can affect this amount.
If you are looking for a trusted financial institution to give you a loan to renovate your home but can’t qualify for a bank loan, GS Credit has your back.
We are a licensed money lender that helps people secure loans at some of the lowest interest rates in the market.
Contact us now or apply for a loan today and have it approved more quickly than you can imagine.