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Getting your key to your dream home is something you and your partner should celebrate. After all, it's the kickoff to an exciting journey where you two get to envision the dream living space together. And then comes renovation... and renovation loans.
Figuring out what you need to know before engaging an interior designer is half the battle won while working together to afford the home renovation is the other. Fortunately, renovation loans in Singapore can help you turn these dreams into reality.
Click here to jump to the bottom of the article to understand what are renovation loans, and some basics you need to know before getting a renovation loan!
6 Best Renovation Loans in Singapore
Now, let's cut to the chase on what to look for in renovation loans. Effective interest rates are key – they include nominal interest and other processing fees, giving you a (realistic and) clear cost picture. Consider the loan tenure (the time you need to repay the loan) too; longer tenure may mean lower monthly payments but could cost more overall.
Lucky for you, we're here to break down these essentials in a summary table, making your research quick and painless. Check out the best renovation loans (and personal loans you might want to take to fund your home renovation) in Singapore here.
| Renovation Loan Singapore | Effective Interest Rate (From) | Maximum Loan Amount |
|---|---|---|
| HSBC Personal Loan | 6.5% p.a. | $200,000 |
| Standard Chartered CashOne Personal Loan | 5.7% p.a. | $250,000 |
| POSB/DBS Renovation Loan | 5.6% p.a. | 30,000 |
| POSB/DBS Eco-aware Renovation Loan | 5.41% p.a. | $30,000 |
| Maybank Renovation Loan | 4.08% p.a. (home loan clients) or 6.53% p.a. | $30,000 |
| TCC Credit Co-operative | 4.00% p.a (flat rate) | $30,000 |
*Information accurate as of the time of writing. For accurate information, please approach the banks directly
HSBC Personal Loan
HSBC does not offer renovation loans. The closest you can consider applying for the HSBC personal loan to finance your home renovation.
| HSBC Personal (Renovation) Loan | |
|---|---|
| Loan Tenure | 1 to 7 years |
| Flat Interest Rate | 3.6% p.a. |
| Effective Interest Rate | 6.5% p.a. |
| Maximum Loan Quantum (Amount Borrowed) | $200,000 |
Take personal loan for home renovation
With a relatively lower flat interest rate (starting from 3.6% per annum), the HSBC Personal Loan does not come with any processing fee and has a loan tenure of up to seven years. In other words, the HSBC Personal Loan would be great for homeowners looking to spread out the total cost of their loan over a longer borrowing tenure.
However, when you run the actual loan through any loan calculator, you want to be using the effective interest rate - which in this case is 6.5% per annum.
So, let's assume you take the maximum $30,000 renovation loan from the HSBC Personal Loan and you intend to repay the loan over 5 years (until Minimum Occupation Period, or MOP, is up) - here's how your total loan will look like:
| HSBC Personal Loan (Renovation) | |
|---|---|
| Effective Interest Rate (p.a.) | 6.5% |
| Loan Tenure | 5 years |
| Loan Quantum (Amount Borrowed) | $30,000 |
| Total Amount Repayable | $35,220 |
| Monthly Loan Repayment | $587 |
At an effective interest rate of 6.5% per annum for the HSBC Personal Loan, if you were to take $30,000 loan for your home renovation, you will have to pay $587 monthly for the next 5 years. At the end of the 5 years, you would have turned the $30,000 principal loan amount, and another $5,220 in interest.
Check out HSBC Personal Loan here.
Standard Chartered CashOne Personal Loan
Standard Chartered bank also does not offer renovation loans, but you can consider applying for its CashOne Personal Loan to finance your home renovations and more!
This ‘renovation loan’ has the lowest interest rate (from a flat interest rate of 2.88% per annum), and you get to enjoy instant loan approval and cash disbursement to your designated bank account in as quick as 15 minutes.
So, let's assume you take the maximum $30,000 renovation loan from the Standard Chartered CashOne Personal Loan and you intend to repay the loan over 5 years (until Minimum Occupation Period, or MOP, is up) - here's how your total loan will look like:
| Standard Chartered CashOne Personal Loan (Renovation) | |
|---|---|
| Effective Interest Rate (p.a.) | 5.7% |
| Loan Tenure | 5 years |
| Loan Quantum (Amount Borrowed) | $30,000 |
| Total Amount Repayable | $34,320 |
| Monthly Loan Repayment | $572 |
At an effective interest rate of 5.7% per annum for the Standard Chartered CashOne Personal Loan, if you were to take $30,000 loan for your home renovation, you will have to pay $572 monthly for the next 5 years. At the end of the 5 years, you would have turned the $30,000 principal loan amount, and another $4,320 in interest.
Standard Chartered Late Fees
If you are punctual and pay your monthly installment consecutively for six months, you get to enjoy the flexibility to repay as low as $50 monthly without incurring a late penalty charge. Finally, if you are new to the bank, you may also be entitled to its ad-hoc promotions, giving you additional cashback on your loans.
Check out Standard Chartered CashOne Personal Loan here.
POSB/ DBS Renovation Loan
The POSB/ DBS Renovation Loans have an attractive interest rate starting from a flat interest rate of 4.88% per annum (or 5.6% p.a. effective interest rate for a 5 year loan tenure).
DBS Renovation Loan Maximum Amount
You can borrow up to six times your monthly or $30,000, whichever is lower, and it comes with a tenure period of up to five years. Up to four Cashier’s Orders (with the first order being free and subsequent orders charged at $5) will be issued under your contractor’s name.
However, these renovation loans come with a quite a heavy handling fee (1% of the approved loan amount) and insurance premium (also 1% of the approved loan amount) - all factored into the effective interest rate.
So, let's assume you take the maximum $30,000 renovation loan from the POSB DBS Personal Loan and you intend to repay the loan over 5 years (until Minimum Occupation Period, or MOP, is up) - here's how your total loan will look like:
| DBS POSB Renovation Loan | |
|---|---|
| Effective Interest Rate (p.a.) | 5.6% p.a. |
| Loan Tenure | 5 years |
| Loan Quantum (Amount Borrowed) | $30,000 |
| Total Amount Repayable | $34,465 |
| Monthly Loan Repayment | $574 |
At an effective interest rate of 5.6% per annum for the DBS POSB Renovationl Loan, if you were to take $30,000 loan for your home renovation, you will have to pay approximately $574 monthly for the next 5 years. At the end of the 5 years, you would have turned the $30,000 principal loan amount, and another $4,465 in interest.
DBS POSB Renovation Loan Calculator
For this calculation, I am using the CPF Total Interest Calculator (hyperlinked) instead of the DBS POSB Renovation Loan Calculator that is provided on their website. Why? Because when you use the DBS POSB Renovation Loan Calculator, DBS sneakily set the interest rate to the flat interest rate of 4.88% instead of calculating it realistically to the effective interest rate of 5.6% like HSBC or Standard Chartered's personal loan calculators do (above).
Consider these if you are an existing DBS or POSB banking customer - you can quite easily submit your application via Digibank online.
Check out the DBS Renovation Loan here, the POSB Renovation Loan here.
POSB/ DBS Eco-Aware Renovation Loan
Those big on eco-friendly living or are into giving their home a sustainable makeover can opt for the POSB DBS Eco-aware Renovation Loan instead. With features largely similar to its counterpart, the POSB DBS Eco-aware Renovation Loan have an interest rate starting from 4.68% per annum.
To qualify, you must fulfill any of the six items in the eco-aware renovation checklist for your home renovation works, including opting to use energy-efficient LED lighting, certified eco-friendly renovation materials and more.
So, let's assume you take the maximum $30,000 renovation loan from the POSB DBS Eco Aware Renovation Loan and you intend to repay the loan over 5 years (until Minimum Occupation Period, or MOP, is up) - here's how your total loan will look like:
| DBS POSB Eco Aware Renovation Loan | |
|---|---|
| Effective Interest Rate (p.a.) | 5.41% p.a. |
| Loan Tenure | 5 years |
| Loan Quantum (Amount Borrowed) | $30,000 |
| Total Amount Repayable | $34,307 |
| Monthly Loan Repayment | $571 |
At an effective interest rate of 5.41% per annum for the DBS POSB Eco Aware Renovation Loan, if you were to take $30,000 loan for your home renovation, you will have to pay approximately $571 monthly for the next 5 years. At the end of the 5 years, you would have turned the $30,000 principal loan amount, and another $4,307 in interest.
DBS POSB Renovation Loan Calculator
For this calculation, I am using the CPF Total Interest Calculator (hyperlinked) instead of the DBS POSB Renovation Loan Calculator that is provided on their website. Why? Because when you use the DBS POSB Renovation Loan Calculator, DBS sneakily set the interest rate to the flat interest rate of 4.68% instead of calculating it realistically to the effective interest rate of 5.41% like HSBC or Standard Chartered's personal loan calculators do (above).
Check out the DBS Eco-aware Renovation Loan here, and the POSB Eco-aware Renovation Loan here.
Maybank Renovation Loan
Maybank's renovation loan interest rates are on the steeper end, but are great for existing Maybank Home Loan customers. That's to say, if you're already borrowing money from Maybank for your mortgage (home loan), then this renovation loan is the best for you. For you folks, Maybank Renovation Loan's interest rate will effectively be 4.08% per annum.
However, if you're not an existing Maybank home loan client, your effective interest rate will be 6.93% per annum (for 1 to 2 year loan tenure) or 6.53% per annum (for 3 to 5 year loan tenure). A summary of Maybank renovation loan's interest rates:
- Maybank Home Loan Clients: 4.08% p.a. (minimum $15,000 and 3 years)
- 1 to 2 Year Tenure: 6.93% p.a.
- 3 to 4 Year Tenure: 6.53% p.a.
So, let's assume you take the maximum $30,000 renovation loan from the Maybank Renovation Loan and you intend to repay the loan over 5 years (until Minimum Occupation Period, or MOP, is up) - here's how your total loan will look like:
| Maybank Renovation Loan | |
|---|---|
| Effective Interest Rate (p.a.) | 6.53% p.a. |
| Loan Tenure | 5 years |
| Loan Quantum (Amount Borrowed) | $30,000 |
| Total Amount Repayable | $35,244 |
| Monthly Loan Repayment | $587 |
At an effective interest rate of 6.53% per annum for the Maybank Renovation Loan, if you were to take $30,000 loan for your home renovation, you will have to pay approximately $587 monthly for the next 5 years. At the end of the 5 years, you would have turned the $30,000 principal loan amount, and another $5,244 in interest.
Check out Maybank Renovation Loan here.
TCC Credit Co-operative Renovation Loan
Not exactly a bank, but TCC Credit is a credit co-operative - or thrift and loan societies - think of them as social enterprises with 'moneylender' services you never knew existed in Singapore. But unlike commercial banks, they are "members-only", meaning they only provide financial services such as loans to their own members.
TCC Credit Co-operative is one of many credit co-operatives operating in Singapore (regulated by the Ministry of Culture, Community & Youth, or MCCY) offering renovation loans to members. Here is a summary of the TCC Renovation Loan:
- Flat interest rate: 4.0% p.a.
- Maximum loan amount: $30,000 or 6 months salary
- Loan period: 1 to 5 years
- Minimum salary: $1,200 per month
It charges an attractive flat interest rate of 4.0% per annum up to a maximum loan amount of $30,000 or 6 months of salary, whichever is lower, for a tenure (borrowing period) of up to 5 years.
Homeowners who earn a minimum monthly basic salary of $1,200 are eligible for this loan. Self-employed personnels and private hire drivers are also eligible for this renovation loan. Co-operatives in Singapore are regulated by the Registry of Co-operative Societies under the Ministry of Culture, Community and Youth.
Finally, when choosing your renovation loans, do not forget to keep in mind the processing fee and other miscellaneous fees, which will contribute to the overall cost of the renovation loan. Renovating your home may be costly, but we know it can also be a rewarding journey for you and your family.
Check out TCC Credit Co-operative Renovation Loan here.
What are renovation loans?
Unlike home loans, which you can take up from the Housing Development Board (HDB) or a bank to finance your mortgage, renovation loans exist solely to finance your home renovations.
In other words, you are borrowing money from the banks or other moneylenders to cover major renovation works. And no, you cannot buy your furniture with a renovation loan.
Some of these renovation works may include:
- Flooring and tiling,
- Basic bathroom fitting,
- Electrical and wiring,
- Painting and redecorating works,
- Structural alterations, and more
What you need to know before getting a renovation loan?
Renovation loans can be somewhat restrictive in Singapore. Well, the idea is to discourage you from borrowing too much money from any banks, licensed moneylenders, or financial institutions at any one point (don't bite more than you can chew!).
Maximum Renovation Loan
In Singapore, you can only take a maximum renovation loan amount of $30,000 or 6 times your monthly salary - whichever is lower. You will also likely need to provide the Cashiers’ Orders so that the bank can pay directly to your contractor, as well as any proof of renovation work, which may run the gamut from official quotation and invoice to before-and-after photos.
Furthermore, your personal credit and income profile will also affect your ability to apply for loans. In other words, the interest rate and processing fee offered may vary from one person to another.
Personal Loans for Renovation
That said, not all banks in Singapore offer renovation loans. Instead of a renovation loan, they offer personal loans (for personal use, duh), which you can consider taking up to afford your renovation projects and more.
Interestingly, should home renovations run over the budget, you may consider taking an in-house renovation loan from your renovation company, though one should research well and exercise caution before doing so.
But here’s the real talk: renovation loans’ high interest rates can be a turn-off. So it’s more savvy to opt for cash upfront and avoid unnecessary costs.