Home renovation with a backdrop of pandemics and lockdowns is a great plan because many renovation specialists and material suppliers have lower than average market prices. However, you can’t use their offer without enough funding.
Fortunately, Singapore’s lenders can provide you with high-quality renovation loans that supply you with renovation funding.
Every year, Singapore’s changing interest rates make a bank-offered home renovation loan exceptionally affordable for borrowers. Thankfully, many renovation loans from 2020 are still worthwhile renovation financing for many Singaporeans.
You’ll learn all about the available and best home renovation loan for your property in this post.
Renovation Loans Vs. Personal Loans
A home renovation loan and a personal loan have many similarities. They can have the same interest rate and loan amount at most times. However, they differ in loan tenure and processing fees that the table below can accurately indicate.
|Financial Product||Yearly Interest Rate||Loan Quantum||Loan Tenure||Processing Fees||Flexibility of Use|
|Renovation Loans||3-7%||6 months of your monthly salary, total renovation costs, or your stipulated amount||1-5 Years||1% of loan quantum + 1% insurance (depending on your lender)||Renovation-oriented|
|Personal Loans||4-6%||6 months of your monthly salary on average||1 Year||Up to 10% of loan quantum||General purpose|
The Best Home Renovation Loans for 2022
Here are the best home renovation loans for this year in Singapore. All interest rates in this table come from a S $30,000 inquiry with a 3-year loan tenure.
|Annual Interest Rate (and EIR)||Minimum Income Requirement||Processing Fee||Maximum Loan Tenure|
|DBS Renovation Loan||3.88% (Flat EIR)||S $24,000||1% of principal + 1% insurance payment||1-5 Years|
|OCBC Renovation Loan||4.18% (5.19% EIR)||S $24,000||1.5% of the approved loan amount||1-5 Years|
|CIMB Renovation i-Financing||4.33% (5% EIR)||S $24,000||1% of principal||1-5 Years|
|POSB Renovation Loan||4.88% (5-8% EIR)||S $24,000||1% of principal||1-5 Years|
|RHB Renovation Loan Monthly Rest||4.18% (Flat EIR)||S 24,000||1% of principal||1-5 Years|
Eligibility and Requirements
Borrowers must comply with the following eligibilities:
- Singapore Citizen or Permanent Resident
- 21 – 65 years of age
- The property owner or related family member (parent, spouse, child, or sibling) who has the owner’s consent
Supporting documents typically include the following:
- Completed Application Form
- Copy of NRIC (front and back)
- Scanned / Digital invoice or quotation signed by contractor and applicant(s)
- Income Documents
- Proof of Ownership (for non-DBS/POSB home loan customers)
- HDB or MCST Renovation Permit (where applicable)
Best Alternatives for Home Renovation Loans
Ineligible borrowers can still have access to other loans with the same loan amount as home renovation loans.
Singapore’s licensed moneylenders can provide you personal loans with enough loan amounts for an effective renovation. You can learn more about them in the next section.
Licensed Moneylender Personal Loan
A licensed moneylender personal loan does away with one detrimental requirement for ineligible borrowers: a high credit score. Licensed lenders can provide you with a six-month salary loan amount that’s equivalent to typical renovation loan amounts.
In most cases, a licensed moneylender personal loan evaluates your current income and monthly salary to approve your personal loan that can function as a renovation loan.
Instant Loan is Singapore’s best licensed moneylender that supplies excellent loan services for both local and foreign customers. Foreigners who have their landlord’s renovation consent can take out a licensed moneylender personal loan using a licensed moneylender.
How Much Does It Take To Renovate Today?
Singapore is well-known for being an expensive country. Therefore, home loans and renovation loans, such as OCBC Renovation Loan, are essential for buying and renovating properties, respectively.
A 4-bedroom HDB flat is the most common residential size in Singapore. Alternatively, you can expect a lower maximum loan for renovation costs with fewer-roomed HDB flats. Here’s a sample computation of the total costs involved in remodeling flats.
|Remodeling Area||Average Light Renovation||Average Moderate Renovation||Average Extensive Renovation)|
|Hacking||S $1,200||S $2,800||S $11,350|
|Masonry||S $3,000||S $10,400||S $37,500|
|Carpentry||S $7,000||S $17,950||S $53,450|
|Plumbing||S $1,200||S $2,800||S $8,700|
|Electrical||S $1,000||S $2,450||S $5,450|
|Painting||S $800||S $1,600||S $2,950|
|Glass & Aluminum||S $1,500||S $3,850||S $9,450|
|Cleaning and Polishing||S $700||S $1,400||S $7,800|
|Appliances||S $7,500 (A/C, Washing Machines, etc.)|
|Total||S $23,900||S $50,750||S $144,150|
4 Factors That Greatly Affect Your Home Renovation Costs
We’ve closely studied the 4-bedroom renovation chart above and discovered these four factors to be the greatest factors that played a huge role in increasing your home renovation costs. Your HDB property’s dimensions and the construction materials you’re using play a huge role in the expenses involved in your home renovation.
Our example computation of a 4-bedroom renovation above is an example of a full-sized renovation cost in Singapore. Therefore, you can expect smaller computations for smaller HDB properties. However, contractors might have varying prices for HDB, condos, and private properties. Your renovation costs increase in proportion to your property’s size.
Renovation Work Needed
A property with a plumbing issue is much more affordable than properties with plumbing, aesthetic, and glass issues. Four-bedroom HDB properties with multiple issues will have increasing renovation costs in proportion to their size. Therefore, 2-bedroom HDB properties with the same issues as 4-bedroom HDB properties will have fewer renovation expenses in the process.
Choice of Materials
Some construction materials are much more expensive than others. Commercial-grade plumbing pipes and faucets are much more expensive than aesthetic-oriented residential-grade plumbing.
High-standard construction materials will always be expensive but give you the longest time and exceptional durability than average ones. On the other hand, standard construction materials will deliver the results you need but not at a high-standard component’s level.
You’ll easily take bigger loan amounts in choosing the best renovation specialists in your area. Then again, investing your approved loan with experienced specialists gives you the best value for money because of their excellent project quality and virtually guaranteed results.
On the other hand, minor renovation projects can benefit from an OCBC Renovation Loan or Maybank Renovation Loan with average or new reconstruction specialists. A handful of renovation procedures isn’t complex and resource-consuming. Plus, you’ll need a lower approved loan amount and consequently pay a lower outstanding loan amount within your loan repayment period.
4 Easy Ways to Create and Manage a Renovation Budget Efficiently
Your financial institution supplies you with only a fixed maximum loan amount. Unfortunately, it’s extremely easy to go way beyond budget because of the challenges and inspiration you’ll encounter throughout the renovation process.
Therefore, we created this list to help you manage and remain consistent with your renovation goals.
Find Licensed and Highly-Recommended Contractors
As we’ve mentioned earlier, an average renovation team can effectively handle a few renovation tasks. However, homeowners will need a capable licensed renovation contractor for a complete home renovation.
HDB homeowners who face massive repair issues from a previous HDB owner will want to use highly recommended and dependable renovation contractors to ensure they can fix all issues properly. They’re a huge investment for homeowners that delivers the most satisfying, life quality-improving results.
Ask Your Contractor The Right Questions
Make sure you ask your contractor about their profession, portfolio, and capabilities.
Some renovation contractors specialize in aesthetics. On the other hand, some contractors will offer high-quality services for function-oriented projects. Thus, you can define their strengths with the right questions during your consultation.
Here are a few questions we recommend that you ask:
- How long have you been renovating HDB properties?
- Is your schedule cleared, or are you handling multiple projects?
- Do you work with subcontractors?
- How do you qualify subcontractor skills?
- Can you tell me about your renovation cost estimate process?
- How long will it take you to provide my renovation cost estimates?
Find Adequately-Priced Materials
Singapore’s market has a balanced renovation materials manufacturer competition. Therefore, you can expect fair prices from numerous manufacturers and distributors.
We highly recommend finding the perfect renovation contractor before finding your renovation materials. These specialists will create renovation estimates that include their trusted manufacturers and suppliers.
Singapore’s home building and renovation specialists undergo certification programs and continuous training from home building material manufacturers. Thus, you can expect that their product recommendations will yield exceptionally satisfying results for your projects.
Stick to One Renovation Plan
Lastly, many renovation projects go beyond their maximum loan amount because homeowners might change their minds about specific construction directions at the last minute. Most borrowers will increase their minimum loan quantum for this reason, too.
You can decrease expenses by sticking to only a single renovation plan. In doing so, you can take out a minimum loan amount within your chosen contractor’s estimates. In addition, you’ll avoid waiting for second loan approval because you continued with your plan.
Is a Long-Term Loan Better Than a Home Renovation?
A home renovation loan is a personal loan with longer-term and higher processing fees beneficial for homeowners short on cash and can repay it within the next few years. On the other hand, a short-term loan that offers the same amount can be trouble for homeowners.
Borrowers who can fully pay their renovation costs in the same year can opt away from most renovation loans. They will do well and have virtually zero interest paid borrowing a bank or licensed moneylender personal loan.
Should I Always Renovate My Property?
Renovation frequency is purely subjective and dependent on the HDB property’s condition when you received it. Many new HDB homeowners find their lived-in but new HDB property with horrid plumbing, electrical, and other troublesome infrastructures. Thus, they should have a full-on professional property renovation.
Effective renovations can last for 20-30 years before having each HDB property refurbished fully. Therefore, you won’t need to have professionals work on your property all the time.
What’s The Difference Between Renovation and Maintenance?
Property renovation involves replacing various basic bathroom fittings or a general home improvement project. These include tiling basic bathroom fittings, structural alterations, external works, and others for other countries.
Maintenance involves checking on the property’s infrastructure condition. By doing this, professional maintenance teams can perform minor and non-costly repairs to restore and prolong your property’s condition. In Singapore, property maintenance is roughly 5-10% of the total property renovation costs.
Can I Take Out a Renovation Loan For DIY Projects?
Banks are willing to provide you a renovation loan under any context. They’ll grant your loan once you fulfill their initial eligibility profile and requirements. They will not inquire about the nature of your planned property renovation.
Borrowers with bad credit can use licensed moneylenders to provide personal loans that can substitute for renovation financing. Licensed moneylenders will not inquire about the DIY project’s nature or house flooring process.
Instant Loan: Your One-Stop Shop For Home Renovation Financing And More
You can get three high-quality loan quotes quickly from Instant Loan. Here are three easy steps you can follow:
- Visit our website
- Fill in the application form
- Wait for a few hours to receive your quotes
- Sign up for a licensed moneylender personal loan.
Singapore Lenders Have Got Your Renovation Plans Covered
- Renovation loans have longer payment terms than personal loans
- Renovation loans and personal loans virtually have the same loan amount
- You can use licensed moneylender loans as an alternative to renovation loans
Receive three free high-quality quotes from Instant Loan quickly. Visit our website and submit your inquiry now!