RHB Renovation Loan

RHB Renovation Loan Monthly Rest Review (2021): Best for Getting an Additional Furnishing Loan

Out of most other popular choices in Singapore, RHB renovation loans with a monthly rest rate have the highest interest rate, on par with the OCBC home renovation loan monthly rest. This means it may not be the most ideal option for homeowners because of different options that you should first consider.

Despite this, while the difference in interest rate is noticeable, RHB loans can still serve as a good secondary option if a borrower fails to get home renovation loans from a different bank. RHB also offers a furnishing loan because bank renovation loans typically only cover the cost of contractor services and materials but do not cover furniture.

 

Key Features

  • The approved loan amount can be as high as 6 times your monthly income or S$30,000, whichever is lower.
  • The flat rate package offers an interest rate of 2.98% for loan amounts from S$15,000 to S$30,000.
  • The flat rate package offers an interest rate of 3.68% for loan amounts below S$15,000.
  • The monthly rest interest rates sit at a consistent 4.18% however much you borrow.
  • Both financial products can have loan terms from 1 year to 5 years.
  • Processing fee of 1%.

RHB is unique from other banks in that it offers a furnishing loan to cover the cost of furniture and appliances. You can get one when you get a renovation loan with RHB, and it comes with preferential rates of 8.80 (Prime Lending Rate + 3.1).

 

RHB Renovation Loan Interest Rates

To get an idea of how much renovation loans are going to cost homeowners, here are sample calculations assuming you get an approved loan amount of S$10,000 from the bank to cover the cost of renovations.

Monthly Rest Interest Rates

Loan Tenure Processing Fee Interest Rate Monthly Instalment Total Interest Payments Total Loan Cost
1 year 1% 4.18% S$852.32 S$227.86 S$10,227.86
2 years 1% 4.18% S$435.05 S$441.22 S$10,441.22
3 years 1% 4.18% S$296.04 S$657.48 S$10,657.48
4 years 1% 4.18% S$226.60 S$876.65 S$10,876.65
5 years 1% 4.18% S$184.98 S$1,098.72 S$11,098.72

 

Flat Interest Rates

Loan Tenure Processing Fee Interest Rate Monthly Instalment Total Interest Payments Total Loan Cost
1 year 1% 3.68% S$850.04 S$200.45 S$10,200.45
2 years 1% 3.68% S$432.83 S$387.83 S$10,387.83
3 years 1% 3.68% S$293.82 S$577.46 S$10,577.46
4 years 1% 3.68% S$224.36 S$769.35 S$10,769.35
5 years 1% 3.68% S$182.72 S$963.48 S$10,963.48

 

Monthly Rest vs. Flat Rate: What’s the difference?

You may have noticed the following terms coming up when you’re seeking financing from a loan provider in Singapore.

Monthly rest interest rates are calculated based on the outstanding balance of the loan. As you pay down your outstanding loan amount each month, the interest payment also reduces over time. This is the common calculation for renovation loans from most banks in Singapore. Advertised rates of monthly rest loans are the same as the effective interest rates.

For flat-rate loans, interest payments are calculated based on the original loan amount. The monthly payment stays the same throughout your whole tenure even though your outstanding loan reduces over time. The effective interest rate on a flat rate loan is higher than the advertised interest rates.

 

Pros

  • Standard processing fees
    Processing fees from both financial products are all at the standard 1%. In addition, you can expect that you won’t get overcharged for the cancellation fee and prepayment fee.
  • Access to furnishing loan
    Homeowners looking to update their furnishings outside of renovation can get furnishing loans with RHB to finance their purchases.

Cons

  • High interest rates compared to other banks and personal loans
    Compared to other renovation loans, a renovation loan from RHB has higher rates, more so compared with other financial options like personal loans.
  • High cashier/disbursement fee
    Unlike the standard S$5 fee, a renovation loan from RHB charges S$10 per disbursement.
  • High minimum loan requirement
    A renovation loan from RHB limits you to borrowing S$10,000 and above. Some banks in Singapore can let homeowners get loans as low as S$5,000.

 

How RHB Renovation Loans Compare to Other Banks

Home Renovation Loan Interest Rate Minimum Annual Income Requirement Processing Fee Minimum Loanable Amount Maximum Loanable Amount Loan Tenure Range Eligible Age
RHB Renovation Loan Monthly Rest 4.18% S$30,000 1% S$5,000 S$30,000 or 6x of monthly income (depending on which is lower) up to 5 years 21 to 55
RHB Renovation Loan Flat Rate 2.98% S$30,000 1% S$5,000 S$30,000 or 6x of monthly salary (depending on which is lower) up to 5 years 21 to 55
Maybank Renovation Loan Monthly Rest 4.10% S$30,000 0.75% S$5,000 S$30,000 or 6x of monthly salary (depending on which is lower) up to 5 years 21 to 59
Maybank Renovation Loan (for current home loan customers) 2.88% S$30,000 0.75% S$5,000 S$30,000 or 6x of monthly salary (depending on which is lower) up to 5 years 21 to 59
DBS Renovation Loans 3.88% S$24,000 1% S$5,000 S$30,000 or 6x of monthly salary (depending on which is lower) up to 5 years 21 to 65
DBS Renovation Loans (for current home loan customers) 2.88% S$24,000 1% S$5,000 S$30,000 or 6x of monthly salary (depending on which is lower) up to 5 years 21 to 65
DBS Green Renovation Loans 2.68% S$24,000 1% S$5,000 S$30,000 or 6x of monthly salary (depending on which is lower) up to 5 years 21 to 65
OCBC Renovation Loan Monthly Rest 4.18% S$24,000 1.50% S$5,000 S$30,000 or 6x of monthly salary (depending on which is lower) up to 5 years 21 to 59
OCBC Eco-care Renovation Loan Monthly Rest 3.98% S$24,000 1.50% S$5,000 S$30,000 or 6x of monthly salary (depending on which is lower) up to 5 years 21 to 59
CIMB Renovation-i Financing 4.18% S$24,000 1% S$10,000 S$30,000 or 6x of monthly salary (depending on which is lower) 5 years and 1 day 21 to 55

 

What We Think of RHB Renovation Loan

When it comes to renovation loans or any other loan option, you want to pay the lowest interest possible. A renovation loan from RHB, therefore, isn’t the best in the market, further compounded by the higher loan minimum and the higher cashier fee. Know more about the best renovation loans in Singapore here.

RHB does offer an additional furnishing loan. But while this makes it easier for homeowners to finance any changes to their home, some solid financial advice is to consider other options from other banks and moneylenders in Singapore, like personal loans with effectively much lower interest rates.

 

Brown Wooden House

How to Apply for RHB Renovation Loans

Eligibility Criteria

To apply, you must be:

  • Singaporeans or Singapore Permanent Residents
  • 21 to 55 years old
  • Main Applicant must be earning at least S$30,000 per annum
  • Joint Applicant must earn a minimum income of at least S$30,000 for the income to be computed as part of the loan quantum
  • Joint Applicant (if any) must be gainfully employed and a spouse, parent, sibling or child of the Main Applicant
  • Either the Main or the Joint Applicant must be the owner of the property to be renovated

 

Required Documents

You must submit the following applicable documents during application:

  • A copy of your contractor’s quotation/Invoice duly signed by Applicant(s) and Contractor(s)
  • Photocopy of NRIC (both sides)
  • Proof of income

Salaried Employee:

  • Latest Computerised Payslip OR
  • CPF Contribution Statement for past 12 months OR
  • Latest Income Tax Notice of Assessment (NOA) and any of the above two income documents
  • Variable Income/Commission Based Earner:
    1. Latest 6 months Computerised Payslip OR
    2. CPF Contribution Statement for past 12 months OR
    3. Latest Income Tax Notice of Assessment (NOA)

Self-Employed:

  • Income Tax Notices of Assessment (NOA) for the latest 2 years
  • Proof of ownership on the property to be renovated e.g. HDB Letter of Approval/Flat Information, CPF Property Withdrawal Statement, Certificate of Title (for private property), Sales and Purchase Agreement, property tax bill, etc.
  • For joint application: Proof of relationship for joint application e.g. marriage/birth certificates
  • For Furnishing Loan: Copy of receipt/invoice of fittings purchased under the Main Applicant’s Name for disbursement of loan

 

Fees

  • Processing Fees: 1% of the approved loan amount
  • Disbursement Fee: S$10 (first cashier’s order is free)
  • Late Payment Fee: 5% above Prime Lending Rate (currently at 5.70%) on any overdue instalment
  • Cancellation Fee: 1% on the undrawn loan amount cancelled (maximum $200)
  • Full Repayment Fee: 2% on the outstanding loan amount
  • Partial Prepayment Fee: 2% on the prepaid amount

 

FAQs

1. What can the RHB Renovation Loan cover?

RHB doesn’t provide the details of what their renovation loan can cover, but it will surely include remodelling and repairs. This may include paint, retiring, rewiring, and all-around carpentry.

2. How does RHB Flat Rate differ from Monthly Rest?

The difference lies in the details of how the interest rate is calculated: the flat rate means you make the same monthly payment throughout your tenure, while monthly rest changes on how much you still have left to repay.

This means while a monthly rest package will have higher advertised rates, payments get lower throughout your tenure.

3. Can I use a Personal Loan Instead of Home Renovation Loans?

Yes, you can! Personal loans are a viable option for renovation because they have flexible coverage, and they have the benefit of having lower interest rates. Click here to find out the best personal loans in Singapore.

 

Our Final Thoughts

  • RHB has higher interest charges than its peers. Consider using it as a fallback instead.
  • The exclusive furnishing loan has high rates as well. It might be better to look at a different financial option.
  • Consider other loans to cover your renovation expenses, like personal loans.
  • Carefully examine your situation as it dictates the best loan offer to consider.

If you’re having difficulty finding or choosing loans, consider the services of Instant Loan. It is a loan comparison service that reviews your financial situation and provides you with a curated list of the best offers from the top licensed moneylenders in Singapore. Save time comparing your options and get your most suitable loan plan today!

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