A Homeowner’s Guide To The Best Renovation Loans In Singapore
Your home should be your favourite place on earth. Because you’re bound to spend the majority of your time there, you should ensure it gives you comfort. After all, it’s where you will make memories for the next few years.
But just like other possessions, your home is also required to be taken care of. Sometimes, it even needs a makeover. This is what the best renovation loan options are for.
Home renovations just like office renovation in Singapore are notorious for being time-consuming and costly. Thankfully, this isn’t the case 100% of the time. The key is to prepare well for it. If this is your first time renovating your home, you’re in for a treat. In this article, we will discuss everything you need to know about the best renovation loan options in Singapore.
Here at OMY Singapore, you will discover the following:
What Is A Home Renovation Loan?
Renovation loans are loans that are taken out for home improvement purposes. Because the best renovation loan is typically unsecured, you don’t need to pledge any collateral to get one. This makes them convenient to apply for.
A home improvement loan is provided for several reasons. This may include setting up wiring and electrical works, adding tiling, flooring, and painting, basic bathroom fittings, and beautifying the external compounds of your property. Most banks only have a specific list of renovations they allow for loans.
How Do Home Renovation Loans Work In Singapore?
As with other reno loans, you have to weigh your options before applying for any renovation loan Singapore. But first, you need to assess if you can meet the criteria of lending institutions such as banks. To qualify for best renovation loan, you must:
- Be a Singaporean Citizen or PR
- Own a property
- Have a good credit score
- Fulfil the minimum income requirement of the bank
After your reno loan is approved, you have to settle the handling fee of your loan amount, which is usually 1%. The insurance premium may also be deducted from your loan amount. This is
integral since in the event of total permanent disability or death, your insurance provider will pay the outstanding on your behalf.
After setting these fees, most banks will disburse your money to your contractors through Cashier’s Orders. Banks usually have a pre-determined maximum issuance number of Cashier’s Orders, and you will be charged more for excess.
Unfortunately, not all banks offer the cheapest renovation loan choices. This makes using a renovation loan calculator Singapore even more important.
As you will see later on, there are banks that recommend clients to get a Home Construction Loan or Personal Loans instead of a renovation loan.
What You Need To Know Before Taking Out A Renovation Loan
Here are some things you must consider when applying for an in house renovation loan Singapore.
Compare different interest rates
Renovation SG loan providers offer different interest rates. Considering this, you may not get the lowest rate for your first best renovation loan option. You must always do your research to know the rate you are getting. Some banks also provide flexible repayment options to suit your needs. If available, use loan calculators to your advantage.
Evaluate the project
When applying for an in house renovation loan Singapore, you must be realistic about what you want to renovate and what you can afford. While it may be tempting to renovate areas of your home that are not necessary, remember that the last thing you want is to go over your budget for a renovation that isn’t worth it.
As early as you can, think of how much value the renovation will add to your home. If there’s no way you can afford all your renovation goals in one go, do it in stages.
Think about miscellaneous fees
On top of your renovation SG loan amount, be prepared to spend on hidden and miscellaneous fees. The fees for the best renovation loan may include late payment fees, disbursement fees, and processing fees.
For example, the disbursement fee is usually 1% of the approved amount. Meanwhile, late payment fees can go up to 5.7%.
Consider your eligibility
Before applying for a home renovation loan Singapore, you must first be aware if you can get one.
One thing that must be considered for any of the lowest renovation loan options is your monthly income. Most banks usually have a minimum annual income requirement of S$24,000 to S$30,000. If you are applying for a personal loan, the minimum requirement may be lower.
Another thing to keep in mind is your credit score. Before applying for a home renovation loan Singapore, maintain a good score to have a higher chance of getting approved.
Consider getting a home renovation loan from the bank you took a home loan from
This is one of the easiest ways to get a renovation loan Singapore, whether you are planning to get an HDB renovation loan or a private home renovation loan. Most banks want to continue to provide their customers with excellent service.
As such, they will give a home renovation loan to you after you get a home mortgage loan from that. Of course, this may not always be the case since some banks may have a stricter policy when giving out renovation loans.
Find ways to decrease your renovation cost
Renovation costs can get expensive, and while it can be tempting to make your Pinterest board come to life, you should also make an effort to bring down the cost of your renovation. For example, you can do some research on the most affordable yet reliable contractors in your area.
The Best Home Renovation Loans In Singapore
Ready to see your top choices for the best renovation loan options in Singapore? Take a look at a side by side loan comparison below.
| Loan | Interest | Tenure | Maximum Loan amount |
|---|---|---|---|
| OCBC Reno Loan | Regular renovation loan: Starts at 4.18% interest per annum Eco-Care Renovation Loan: Starts at 3.98% per annum | 5 years | 6x your monthly salary or S$30,000, whichever is lower |
| POSB Reno Loan/DBS Reno Loan | Regular renovation loan: Starts at 4.18% interest per annum POSB Green Renovation Loan: starts at 3.88% per annum | 1 to 3 years 4 to 5 years | 6x your monthly income or S$30,000, whichever is lower |
| UOB Renovation Loan | Contact UOB for more information | Repayment period of up to 35 years, or when the borrower reaches 70 years old, whichever is earlier | Up to 75% of your renovation costs |
| Standard Chartered CashOne Personal Loan | Starts at 3.48% per annum | 5 years | S$250,000 |
| HSBC Personal Loan | Starts at 3.2% per annum for regular customers Starts at 2.6% per annum for existing premier customers | 1-7 years | S$200,000 for Singaporeans and PRs S$100,000 for Foreigners |
OCBC Renovation Loan
| Interest | Regular renovation loan: 4.18% interest per annum Eco-Care Renovation Loan: 3.98 per annum |
|---|---|
| Maximum loan amount | 6x your monthly salary or S$30,000 |
| Loan tenure | 5 years |
With the OCBC Reno Loan, you can borrow up to 6x your monthly salary or S$30,000, whichever is lower. Although this isn’t the cheapest renovation loan interest rate in the market, it’s a great option for those who are unable to get a loan from other banks.
Despite being pricey, you can benefit from a simple and secure online application with 60-second approval if you go for this best renovation loan.
You also have the option to go for an Eco-Care Renovation Loan. Through this OCBC reno loan, you can become part of a greener Singapore.
All you need to do is verify that your home will be energy efficient and aligned with the Tropical Home Energy Efficiency Assessment by the Building and Construction Authority (BCA). With the Eco Care Loan, you can enjoy a promotional rate of 3.98% per annum and enjoy a one-time S$88 bill rebate after signing up for Senoko’s LifeGreen24 Plan.
This loan allows you to enjoy up to 5 years of repayment with 4.18% interest per annum, and your first 3 cashier orders are free to be issued with your appointment contractor.
Eligibility:
- Singaporean or Singapore PR
- 21 to 59 years old
- Must have a minimum income of S$24,000 annually
- For joint applications, at least one applicant must earn the minimum income requirement or more
Apply here.
POSB Reno Loan/DBS Reno Loan
| Interest | Regular renovation loan: 4.18% interest per annum POSB Green Renovation Loan: 3.88% per annum |
|---|---|
| Maximum loan amount | 6x your monthly income or S$30,000, whichever is lower |
| Loan tenure | 1 to 3 years 4 to 5 years |
The POSB renovation loan offers one of the most competitive home renovation loan rates in Singapore, especially for those who want to have 1-3 or 4-5 years of loan repayment.
This best renovation loan offers 4.18% interest per annum for the POSB Renovation Loan, and interest rates start at 3.88% per annum for the POSB Green Renovation Loan.
The Green Renovation Loan is incredible for those who want to give their home a sustainable makeover. All you need to do is submit your loan application online, and select at least 3 out of the 10 items in the Green Renovation Checklist that applies to your home.
Expect higher fees for longer repayment terms for the POSB eno loan. Despite this, it’s still an amazing option for existing home loan customers or DBS and POSB.
With this POSB/DBS reno loan, you can borrow up to 6x your monthly income or S$30,000, whichever is lower. Up to 4 Cashier’s Orders will be issued under your contractor’s name.
Keep in mind that loan usage is only limited to:
- Solar Panel installation
- Electrical and wiring works
- External works within the compound of the house
- Flooring and tiling
- Built-in cabinets
- Painting and redecorating works (such as wallpaper)
- Structural alterations
- Basic bathroom fittings
Eligibility:
- Singaporean or Singapore PR
- 21 to 65 years old
- Property must be owned by the applicant or a related family member
- Must have a minimum income of S$24,000 annually
- For joint applications, the main applicant must earn the minimum income requirement or more, and the joint applicant must have a minimum income of S$12,000 per annum
Apply here.
UOB Renovation Loan
| Interest | Contact UOB for more information |
|---|---|
| Maximum loan amount | Up to 75% of your renovation costs |
| Loan tenure | Repayment period of up to 35 years, or when the borrower reaches 70 years old, whichever is earlier |
While UOB doesn’t have a specific renovation loan for their clients, those who want to get a loan to renovate their homes can take advantage of the UOB Home Construction Loan. This is a great choice for construction loan for home renovation.
After your renovation is complete and upon you receive issuance of a temporary occupation permit that allows you to stay in your newly-renovated property, the loan will transform to become a UOB Home Loan. This can either be a Private Home Loan, HDB renovation loan, or Home Loan for Foreigners.
This best renovation loan allows you to enjoy up to 75% of your renovation costs. One of its major upsides is its flexible repayment period of up to 35 years, or when the borrower reaches 70 years old, whichever is earlier.
Eligibility:
- Singaporean or Singapore PR
- 21 to 50 years old
Contact UOB here to apply for the loan or check their interest rates.
Standard Chartered Renovation Loan
| Interest | starts at 3.48% per annum |
|---|---|
| Maximum loan amount | S$250,000 |
| Loan tenure | 5 years |
Just like other banks, Standard Chartered does not offer any specific renovation loans, but they recommend clients to get their CashOne Personal Loan instead for their renovation needs. This option that you can take in lieu of the best renovation loan has a tenure of up to 5 years, and interest starts at 3.48% per annum.
Applicants can also get approved in as fast as 15 minutes. Upon loan approval, you can also get up to 1% cashback for loans S$10,000 to S$50,000, and 1.2% cashback for loans S$50,001 to S$250,000. New clients can also enjoy an additional S$100 cashback for any loan amount.
Eligibility:
- 21 to 65 years old
- Must have a minimum income of S$20,000
Apply here.
HSBC Renovation Loan
| Interest | 3.2% per annum for regular customers 2.6% per annum for existing premier customers |
|---|---|
| Maximum loan amount | S$200,000 for Singaporeans and PRs S$100,000 for Foreigners |
| Loan tenure | 1-7 years |
HSBC does not have a specific loan that you can use for home renovations, but you can apply for a personal loan with them. This allows you to enjoy a low interest of 3.2% per annum, with no processing fee. Existing Premier customers can enjoy a preferential interest rate of 2.6% per annum. That said, it’s one of the cheapest renovation loan Singapore choices, despite not being particularly offered for the said purpose.
This lowest renovation loan has a fixed monthly repayment with a choice tenor between one to seven years. With this loan, you can get approved in 1 minute, and get up to S$200,000 for Singaporeans and PRs, and S$100,000 for foreigners. These high maximum amounts make it a top choice for those who are expecting to spend more money on their home renovation.
Eligibility:
- Singaporean or Singapore PR
- 21 to 65 years old
- Must be a salaried employee, variable/commission-based employee, or self-employed
- Must have a minimum income of S$30,000 annually for Singapore/PR
- Must have a minimum income of S$40,000 annually foreigners
Apply here.
A Word From OMY
Renovating your home can be costly, but it can also be a rewarding experience. With the proper preparation, a renovation loan can change your home
Just remember that even before getting your home renovation loan Singapore approved, the major thing you should focus on is how you can get the most out of your money.
If you want to apply for a personal loan, OMY can help. Get a tailored loan offer in just a few clicks here.
