So you just bought your first home, or finally, closed on your dream home only to realise they’re a bunch of renovations you need to do to upgrade the home or fit your style. You’re short on finances, but you remember…TA-DA…  you can get a renovation loan to pay for the cost of renovations. Renovation loans allow you to borrow a lump sum of money to pay for various renovation costs, and they can be a great way to make your dream home a reality.

But if you’re asking how much renovation loan can I get in Singapore? Read on to find the answers. We’ll also let you in on how renovation loans work in Singapore, what they can be used for, what you should look out for when applying for a renovation loan, and the best renovation loans in Singapore.

How Much Do Home Renovations Cost?

The cost of renovating a home can vary greatly depending on the scope of the project, the materials used, and the location of your property. On average, a full-home renovation can cost anywhere from $20,000 to $100,000 or more. A simple renovation such as a kitchen or bathroom remodel can cost between $10,000 to $40,000. However, these costs can vary significantly depending on the size of your home, the materials you choose, and the complexity of the project.

Many experts recommend setting aside 10-15% of your home’s value for renovation costs. It’s also important to note that unexpected costs can arise during the renovation process, so it’s always good to have a contingency budget.

How Do Renovation Loans Work In Singapore?

A Home renovation loan is a type of personal loan, but the key difference is that it can only be used for renovations.

Reno loans have lower interest compared to personal loans and are unsecured loans. This means no one is coming for your property if you fail to pay the loan.

Just like other loans, you’ll be required to pay your renovation loan in fixed installments monthly. However, unlike personal loans that have a fixed interest rate, the interest rate for a renovation loan is calculated on the outstanding loan balance. Home renovation loan repayment tenure range from 1 to 5 years.

There are three ways you can get loans to renovate your home. They include:

  • Bank renovation loans
  • HDB renovation loans, and
  • Renovation loans from licensed money lenders.

Keep in mind that your renovation loan is not given to you as cash or paid to your bank (excepting you’re taking a personal loan and using it for renovation purposes). Renovation loans are paid directly to the contractor stated in the form of a cashier order.

If you’re taking a reno loan from the bank, extra fees may be charged for disbursing fees to more than one contractor.

What Can Renovation Loans Be Used To Pay For?

Renovation loans are to pay for a wide range of renovation costs, including:

  • Flooring and tiling
  • Painting and decoration
  • Cabinetry
  • Electrical and wiring
  • Basic bathroom fitting
  • Roofing and external renovation work outside the home
  • Other materials and supplies
  • Labour costs

Renovation loans can only be used for structural renovation purposes, and as such, can’t be used for things like Furniture and fittings or the purchase of household appliances.

What Should You Look Out For In A Renovation Loan?

When applying for a renovation loan, there are a few things to look out for.

  • Interest rate: Compare the interest rates of different lenders to find the best deal. Avoid reno loans with extremely high interest rates.
  • Loan term: Consider how long you will need to repay the loan and whether you can afford the monthly repayments.
  • Fees: Look out for any hidden fees, such as application fees or early repayment fees, cancellation fees, and late payment fees.
  • Eligibility: Check whether you meet the lender’s eligibility criteria, such as income and credit score requirements.
  • Flexibility: Look for a loan that offers flexibility in terms of the renovation’s progress payments. Some lenders disburse the money in stages as the renovation progresses, which can be more convenient for the borrower.

How Much Renovation Loan Can I Get?

Some factors impact the amount of renovation home loan you can get. Some of these factors include:

  1. Credit score: Your credit score and credit history will also be taken into account when determining the amount of loan you can get. Generally, borrowers with a higher credit score and a good credit history will be able to borrow more than those with lower credit scores.
  2. Income: Your income level will also be taken into account when determining the amount of loan you can get. Lenders do this to ensure that you are to repay the loan.
  3. Repayment ability: For money lenders that might not focus on your credit score, your repayment ability determined by your income level and stability might influence how much you can get.

Keep in mind that for most banks, the maximum reno loan you can get is the lower of 6 times your monthly income or $30,000.

You might be able to get a higher amount from licensed money lenders provided you meet their criteria.

Best Renovation Loans In Singapore

The table shows the best reno loans* in Singapore in 2023. However, it’s recommended you do your research and make an informed decision.

*Information correct at time of publishing

Annual Interest Rate (Rest Rate)Minimum Income RequirementProcessing FeeMaximum Loan Tenure
Maybank4.98%6X monthly income or $30,0001.25%1-5 years
DBS3.88% to 4.18%6X monthly income or $30,0002%1-5 years
HSBC Personal Loan3.8%6X monthly income or $30,000$88 (waived for online applicants)1-5 years
CIMB Renovation i-Financing4.20%6X monthly income or $30,0001%1-5 years
Licensed moneylenders1-4%$2000 monthly income1%6-12 months

Get A Renovation Loan Today – Make Your Dream Home A Reality

If you’re looking to get a quickly approved renovation loan to make your dream home a reality, Credit 21 offers the best renovation loans at low interest rates. Contact us right away to speak to a renovation loan expert, or apply for a loan online.

Frequently Asked Questions

1. Can I Use My CPF To Pay For My Renovation Loan?

No. Regardless, if your HBD is built to order, you can use your CPF to offset the cost of renovation.

2. Who Is Eligible For Renovation Home Loans In Singapore?

  • Singaporean or Permanent Resident
  • Must be 21-65 years (can vary between lenders)
  • Must earn at least $24,000 annually (for joint accounts, one person must be earning this)

3. Can I Get Two Renovation Loans?

Most lenders will give you a maximum of $30,000. You can choose to get another loan from a different provider, but note that the amount of loan you can get is limited to your Debt Servicing Ratio (DSR) of 60%. All your debts cannot exceed 60% of your monthly income.

4. What Fees Are Associated With A Reno Loan?

Typical fees are:

  • Processing/handling Fee: 1% of the approved loan amount
  • Late payment fee: $80
  • Early repayment fee: Usually 1-2% of the outstanding loan balance
  • Cancellation fee: 1% on the loan amount canceled