A Complete Guide to the Renovation Loan Singapore

Posted by goldencredit on June 27th, 2018

Renovation of the house is a normal process and everyone faces sometime in their life. Singapore is known for the luxurious building and lifestyle. This is the reason that renovation is a frequent task in the country. People here prefer buying a new house after the marriage or renovate the part of the house. For this, they look for the interior designer to help and make the house look like a dream home. However, you may not have enough money for this and look for the renovation loan in Singapore. This is the ultimate solution where you can transform your home even if you lack enough money but have the capability to pay it later.

What Is a Renovation Loan?

If you are new to this type of loan, it is not much different than the personal loan. The main purpose of this loan is to support an individual to renovate the dream home even when you do not have enough money. The interest rate for this loan is substantially lower compared to other loans. For availing this loan an individual need to provide the proof of the homeownership for getting the better interest rate and enough money. For availing the renovation loan you should be either the owner or the family member of the owner. The tenure to pay this loan is between the 1 to 5 years. The amount you get as a loan depends on your annual income as it decides your repayment capability. There are a minimum income limit criteria and another document requirement. So get in touch with a moneylender to find the details of this loan.

Before you make a final application for the renovation loan Singapore, you should know the use of the loan. This loan cannot be used for furniture or furnishing the home. The loan is purely suitable for activities like electrical wiring, flooring and tiling, painting and papering the walls, carpentry work such as installation or building of cabinets, structural alterations, fitting of bathroom heater and works on external ports of the property, roof and fences.

How Does the Renovation Loan Work?

Do you know how to apply for the loan, how it is approved and what is the complete process? If no, you can easily apply for renovation loan through online, over the phone or by visiting the office of the money lender physically. On the other hand, banks have a different procedure where they need heavy documents, proper verification and long waiting processing time. Therefore, if you urgently need to avail the loan you should get in touch with the professional or licensed money lenders in the area. For this, you also need to facilitate the documents like proof of income, NRIC, contractor’s invoice, proof of property ownership and proof of the relationship between the applicant and owner. For this, an individual also needs to decide the loan amount you need to borrow and the tenure of the repayment.

Once the renovation loan Singapore is approved, the contractor will be paid the approved loan amount. Before applying for the loan, it is good to analyse the market, do proper market research and then finalise the moneylender in your area. Just look for the best option who can provide the lowest interest rates, easy application, enough loan amount and the easy repayment option as per your capability. You can also check with the banks, as they offer loans at affordable rates, but need proper documentation and long processing time. Adding to this, you also need to consider the few important things while considering the loan. For this:

Check loan eligibility: for being eligible for the renovation loan you need to be the citizen of Singapore or have applied for it, should fall in the specified income slab, must be of 21 or above in age and should hold the ownership of the property.

Find out the loan amount needed: When you apply for the renovation loan Singapore, you should be well clear about the loan amount you can borrow based on your credit score and income. This amount also depends on the scheme offered by different banks or licensed moneylenders. There is a set formula or calculator to check your loan amount based on various factors. Banks mostly stuck to the rules and do not extend the money if you need more. On the other hand, private moneylenders go a step ahead and provide an additional amount. This is the reason that licensed moneylenders are gaining so popularity in the country.

Understand the interest rates and types: The interest rates mostly depend on the renovation package. Banks have a flat rate, but moneylenders charge higher interest rates as they offer unsecured loans and a higher risk involved in it. The rate also depends on the original amount you applied and documents you facilitated. Mostly the interest rate calculated on the basis of flat rate or a monthly rest rate.

Take note of the processing fees and additional charges: Processing fees and additional charges play a vital role when you apply for the renovation loan Singapore. This is additional money that an individual pay for availing the loan. This is mostly a percentage of the loan amount. This mostly includes charges for processing, disbursement, cancellation and repayment fees. Money lenders also charge insurance premium, late payment fees and some penalties. So be clear about all the charges that a loan package applies.

Banks in Singapore also offers a bonus when you apply for the renovation loan Singapore. This includes a discount on the processing fees. Some banks also offer a discount on the interest rates. If you look for the renovation loan from a licensed moneylender then you can have various options and easy access to the required loan as per the need. Local moneylenders work for the help of clients and with an intention to provide them with the needed money to renovate their dream home. Therefore, just explore the internet and find the perfect moneylender in your area that has gained high rating and positive feedback from customers.