Key Things to Know About Renovation Loan in Singapore

Have a dream to own a home in Singapore? Or you just need some renovations and improvements on your home?

The situation could be any! Due to the high property prices and rich standard of living, it’s quite difficult to manage heftier costs for personal space. This means you have less cash on hand to give your hard-earned home stylish improvements. 

In order to handle everything from new furniture material to paint your house, you need strong financial assistance in bringing your desired abode to life. With the advent of new trends in furniture, everyone requires something that would help you feel relaxed and convert your home according to the new functionality system. 

At the same time, with the availability of various bankers and licensed money lenders in Singapore, it becomes quite affordable to take some financial help from them. Many lenders offer loan services, especially if you’re planning to renovate your house. But sometimes, acquiring such emergency cash from the bank is a little difficult due to a slow and long process. But, a legalised money lender in Singapore is always ready to assist their customers even if you have a poor credit history. They offer personal loans for bad credit, so you don’t have much to worry even if you a less-than-average credit score. Though, the better your credit score, the higher the chances of loan approval.

But, getting a renovation loan the smart way requires a little extra research and care to make sure you get the best offer available. That’s why we’re here going to mention some simple things about a renovation loan. Let’s get started.

Things To Know About Home Renovation Loan

1. Determine Actual Loan Eligibility

While acquiring a home renovation loan in Singapore, make sure you are eligible according to their terms and conditions. There are general following things matter when it comes to obtaining a loan for renovations. Let’s have a look at those requirements:

• Applicants must have either a Singaporean or Permanent Resident. 
• The minimum age requirement of applicants for at least 21 years. Whereas, the upper age limit varies between 50 to 65 years old.
• Make sure you’ve your actual annual income or salary slip.
• Loan applicants have to either be the property owner or a next-of-kin (E.g. parent, spouse, child, or sibling).
• Many licensed moneylenders offer a flexible pay off term that can lie between 1 to 5 years. 

Before applying for a renovation loan, it’s recommended that read the terms and conditions of their whole process. The more you keep yourself informed, the more likely you’ll get a better option.

2. Take Note on Interest Rate

Another important factor that comes on the way while looking for a home renovation loan is to determine the interest rate on each payment. In Singapore, you’ll mind some major and well-established organizations that provide reliable interest rates on loans. Whereas, some organizations focus  – how to earn more and charge high-interest. Therefore, it’s essential to get as much information before applying for a home renovation loan. 

Generally, the interest rate depends on your renovation loan package. Some banks compute interest rates differently on the monthly basis, while others might adopt a flat rate instead. So, what you’ve to do exactly? To put everything in line, it’s recommended that consider taking a loan on a monthly basis. In this, the interest rate is charged according to the outstanding sum owed at the start of every calendar month. Whereas, in the case of flat-rate loans, it entirely depends on the original amount borrowed. 

3. Credit Score and Monthly Income

Having a good credit score means the chances are higher for getting fast loan approval for a renovation. A credit history basically represents – how effective are you in repaying the loan and how you pay off all your debts or credit obligations on time. The better the credit score, it means you’re eligible to get quick approval on a loan at the most favourable terms. In any case, if you fail to put your credit score in the right shape, you can hire a licensed moneylender. They’ll guide you in the right way and also provide a loan even if your credit score isn’t that good. 

While opting for a home renovation loan, it’s also recommended that keep a record of their income and expenses. A lender can ask you for this in order to determine your repayment capability. That’s why make sure you have proof of income. Keeping an estimate of everything in advance can protect you from any trouble.

4. Total Duration Period of Loan

Generally, The duration of a Singapore renovation loan can be 3 years or within 5 years, while personal loans come with a repayment plan of up to 7 years. Indeed, lenders usually ask for your repayment capacity before they make the approval on your home renovation loan. Either you’re applying for home renovation at a bank or at moneylenders, both will calculate all monthly expenses, plus also ask for monthly income as proof. Lower monthly repayment means you’re extending your repayment period with a higher interest rate. It means you’ve to pay more money as compared to the monthly instalment of the loan.

5. Check Out Various Associated Benefits

Once you’ve determined all the renovation loan options, it’s time to see its major benefits. Sometimes, it becomes quite difficult to get a loan from a bank as they are slow in the process due to various departments, and they are also strict with their rules and regulations. People with low credit scores can’t get loans easily from banks. However, applying for home renovations loans, they’ll virtually make your loan risk-free as they can seize your given assets.  

Wrapping Up!

Each loan has a term in which it must be repaid that includes repaying the entire amount owed together with interest. Hence, it’s important to correctly calculate the loan repayment period so you can pay the right amount at the right time. 

In addition, you also need to keep yourself aware of fraudsters or non-registered moneylenders while looking for a home renovation loan in Singapore. So, it’d be good if you give priority to licensed moneylenders who’re trained and board-certified. Furthermore, before signing any contract with loan lenders in Singapore, visit their company personally and examine all their terms and conditions regarding the loan.

Cash Direct is a Jurong East money lender with a variety of loans — from wedding loans, medical loans to debt consolidation loans, and many more. If you’re ready to submit your loan application or simply drop an enquiry, don’t hesitate to contact us.