A renovation loan is a kind of credit given to property owners who want to renovate their building or home. If you want to upgrade the various aspects of your home, you probably need to consider taking out a renovation loan, especially if it is a big project. In Singapore, renovation loans are offered by banks and other financial institutions to property owners who have a source of income. Rather, this means that you can qualify for this loan as long as you are able to service it. You will also need to be a Singaporean or a permanent resident in Singapore for you to qualify for this loan. A Renovation Loan in Singapore can be utilized in a number of ways. You can use the loan for all your flooring needs, repainting of the roof, renovation of the bathroom and so on.
Would you like to apply for a renovation loan in Singapore? Well, you can go ahead and apply for this loan if you need to make renovations to your home. Here are 4 easy steps to guide you in applying for this kind of a loan:
- Are you eligible?
This is the first question you should always ask yourself before you make an application. The requirements could differ a little, depending on the lenders. However, there are general requirements such as citizenship, age, your income and ownership of the property that you need to renovate. You need to be a Singaporean or a permanent resident in Singapore for you to qualify for this kind of a loan. Banks require borrowers to be at least 21 years of age. You will also need to be a property owner or a next of kin of the property owner for you to qualify for this loan. The loan is offered for a repayment period of up to 5 years.
- How much can you borrow?
There are limits to the amount of money one can borrow as a renovation loan. The amounts you can borrow from the banks depend on the schemes offered. With POBS’s home renovation loan, one can borrow up to 6 times of their monthly salary. Well, the banks can lend you up to $30,000, whichever is higher.
If you are planning to borrow a renovation loan for the purpose of purchasing property, it is advisable that you watch the quantum of the loan. This can determine if you can buy property through this loan. There is the issue of TDSR or the Total Debt Servicing Ratio to consider. Under this framework, one cannot commit more than three-fifths of their monthly income to service the renovation loan. It is important that you consider the above facts before you apply for a renovation loan and commit it to your home improvements.
- What are interest rates applicable?
Depending on the kind of renovation loan that you take, your interest rates will be calculated differently. It would be advisable to learn more about the interest rate regime applied to your loan so that you can agree to these terms and conditions. Some banks may compute the interest rate on a monthly basis while others will calculate the interest rate on a flat rate. Ask your lender to more explain the interest rates applicable to your renovation loan before you borrow from your lender.
- Find the best renovation loan lender
If you are comfortable with the above three tips, it is time for you to apply for the loan. This means you will now need to visit your lenders and fill an application form. There are some pertinent issues you will need to know about the lender just to be sure that they are good for you. Are they licensed? What is their track record? Are they trustworthy? Choose a lender who is offering the lowest interest rates. You can easily make your loan application online and have it credited to your account once you fulfill all the conditions of the lender.