There is no place like home. After all, it is where you can enjoy privacy, security and comfort. 

Add a few touches and you set it apart from any other. But over time, these touches may lose their appeal, and become dull and outdated. 

When that happens, your abode might need to be renovated. 

However, renovations can be costly, especially if you haven’t saved up for it. Depending on the work required, you may need a renovation loan in Singapore. 

A renovation loan will cater to most of your remodelling needs and help restore your home to its former glory, or perhaps give it a brand-new look altogether. 

This article will guide you on how to apply for a renovation loan in Singapore. 

What Is A Renovation Loan?

A renovation loan is a loan taken to finance the repair and improvement of your home to restore it to good condition. 

Banks and money lenders offer loans for renovating new and old homes through painting, redecoration, and other repairs. 

However, there are some things you cannot do with a renovation loan in Singapore, some of which we will cover later. 

Nevertheless, renovation loans allow you to give your home the makeover it needs without tapping into your savings. 

These loans have flexible repayment terms and a long loan tenure that allow you to keep your cash flow in check.

Differences Between Renovation Loans And Personal Loans

There are different types of loans available in Singapore such as car loans and wedding loans. 

Each loan is designed to help meet a specific need. 

Before you learn how to apply for a renovation loan, let’s compare personal and renovation loans to see how they differ from each other.

Personal Loans

This type of loan is intended to help you meet daily financial needs such as settling emergencies. 

A personal loan can be useful when you need a cash top-up to purchase costly home appliances, for instance. 

The good thing with a personal loan is that there’s no limitations on what you can use it for.

Whether you want to pay a medical bill or fund your next vacation, the possibilities for a personal loan are limitless.

Home Renovation Loans

A renovation loan in Singapore is used to cover expenses incurred during home repairs and revamps. 

For instance, if your pipes burst, you may take a renovation loan to repair or replace them. 

Such a loan is tailored towards improving the condition of your home. It allows you to change how your home looks through cosmetic and interior changes.

A home renovation loan ensures your home gets its facelift. However, home repairs can be costly and you may end up draining your finances unless you saved up for the renovation.

However, deciding which of the above loans to take is vital. This is because, unlike a personal loan, a renovation loan has certain restrictions. 

This means you cannot use it for other expenses other than home renovation.

In addition, there are limits to the type of renovations you can do with a renovation loan. For instance, you cannot buy a new refrigerator with such a loan. 

The table below highlights more differences between a renovation and personal loan.

Home Renovation RatePersonal Loan
Interest RateLower interest rate
Ranges from 3-4%
High interest rate
Ranges from 3.5-11%
Loan AmountSmall amount
Up to six times your monthly income
Higher amount
Up to eight times your monthly income
FeesLower fees
Processing fees: 0-1%
Admin fees: 0-1.5%
Higher fees
Processing fees: 1-3%
Admin fees: Variable
Loan TenureShort repayment terms
Maximum five years
Long repayment terms
More than five years
UsageLimited usage
Must be only used for renovation purposes
Limitless usage
It can be used for anything, including medical expenses

What Can You Use A Renovation Loan For?

You can use a home renovation loan for: 

  • Flooring and tiling
  • Refurbishing built-in cabinets
  • Bathroom fittings
  • Painting and décor works
  • Electrical, plumbing, and wiring work 

However, you cannot use a renovation loan for:

  • Curtains 
  • Home appliances
  • Electrical appliances (e.g. refrigerator, entertainment system, washing machine)

Before you take a loan, be specific about your needs to ensure you get the right loan to meet them. 

What To Consider Before Getting A Renovation Loan

Before you get a renovation loan in Singapore, there are several factors you should consider. These include: 

Loan Amount

Give careful thought to the amount your home makeover will cost. This is crucial to ensure you do not borrow too much or too little. 

If, for example, this is your first time doing a home renovation, you may want to seek help from a contractor or use a renovation loan calculator to estimate the entire cost for the revamp. 

Your calculations should include minor and major expenses, and give you a reasonable estimate of the amount you’ll need.

Or contact a licensed money lender like Credit 21, which offers renovation loans, for help and advice. 

Loan Provider

Once you have a loan amount in mind, you’ll need to consider who you will borrow from: a bank or money lender. 

There are two types of bank renovation loans:

  • Flat rate renovation loan: This loan calculates interest based on the entire principal amount. 
  • Monthly rest renovation loan: This loan allows you to repay the loan amount first and then pay the interest later. With such a loan, interest is only charged on the outstanding amount. 

Both banks and money lenders will have minimum and maximum borrowing amounts. 

For instance, some banks may require you to borrow at least $10,000 for the loan application to be approved. 

It is important to understand how each provider works, and consider its advantages and disadvantages before making a choice. 

As a rule, only choose a provider with repayment terms that fit your financial situation. 

Interest Rates

Understanding how renovation loan interest rates affect your debt is essential. This is because interest rates influence borrowing costs. 

Banks have lower rates but longer payment terms. This means you’ll repay the interest over an extended period. 

In addition, longer payment terms mean you will pay more in the long run because the interest will accrue when you repay the loan. 

Licensed money lenders in Singapore have higher rates but shorter loan tenures. 

This means there won’t be much time for the interest to build up. However, you’ll need to make repayments fast and consistently. 

Missed payments will affect your credit score, which could hurt your chances of getting financing in the future.  

Fees And Charges

A renovation loan from a money lender or bank is likely to come with additional fees such as processing, administrative, late payment, and insurance fees. 

  • Lenders charge processing fees to cover the costs incurred when processing your loan application.
  • Administrative fees are imposed by the lender to cover costs of opening, managing, and closing documents associated with your loan.
  • Late payment fees are charged when you fail to make a payment on time. 
  • The lender charges insurance fees as protection if you lose your ability to repay the loan due to unemployment, illness, and other unforeseen circumstances. 

All these fees will affect the total amount that you’ll owe the lender. 

Criteria And Maximum Loan Amounts

To qualify for a renovation loan in Singapore, you must meet the following criteria:

  1. Be a Singaporean or permanent resident who is between 21 to 65 years old
  2. Earn at least $20,000 per annum
  3. Have an employed joint applicant (e.g. your parent, spouse, child, or sibling)
  4. Be a certified owner of the home to be renovated
  5. Have a good credit score

Your income will determine the loan amount you can borrow. The maximum you can borrow is four times your monthly income for banks. 

A renovation or furnishing loan in Singapore often has a repayment period of up to five years, which helps you manage debt and make payments on time. 

Take your financial status and ability to repay the loan into consideration before getting a loan. The repayment terms should be reasonable and fit your budget so you don’t strain your finances. 

How To Apply For A Renovation Loan 

As mentioned earlier, you can get a renovation loan in Singapore from a bank or licensed money lender. 


For banks, the application process is simple.

  1. Calculate the loan amount you’ll need for the renovation through a contractor. 
  2. Check if you qualify for the loan based on the criteria mentioned above. 
  3. Prepare the required documents: 
  • Proof of residency
  • Proof of income
  • Copies of your NRIC
  • Latest IRAS Notice of Assessment
  1. Apply for the loan. 

You can make an online application on the bank’s website or apply in person at one of its branches.

Make sure you submit all the required documents. Once your loan has been processed, you’ll receive an email or letter confirming your loan has been approved.

Note that bank renovation loans are not disbursed to you but your contractor. This ensures that the loan is used solely for home makeovers and not other personal expenses.

Money Lender

For a legal money lender, the application process can be done through its official website. Here are the steps. 

  1. Ensure you are eligible for the loan. 
  2. Prepare the relevant documents: 
  • Latest income statements
  • Proof of home ownership
  • A signed quotation from a legitimate contractor
  • A renovation permit

Note that the money lender you choose may have other requirements you’ll need to comply with when you fill up an online application. 

For instance, some may specify that they only accept JPEG, PDF, or JPG formats. In addition, each file submitted should not exceed 5MB. 

  1. Once you have met all the requirements, you can submit your application.

You’ll also need to go through a verification process. Again, depending on the money lender, you can do this digitally or physically at its offices. 

A Renovation Loan Is Good For Home Repairs

Renovating restores not only your home but may even revitalise the lives of its occupants. 

If you are thinking of renovating your home but don’t have the finances, take the time to review what banks or licensed money lenders are offering. 

A renovation loan in Singapore comes with flexible repayment terms that allow you to upgrade your home while maintaining control over your finances. 

If you are wondering how to apply for a renovation loan in Singapore, get in touch with one of our experts at Credit 21, and we will be happy to help. 

Contact us now or apply for a renovation loan with us today. We will get back to you within an hour.