Home Improvement & Renovation Loans

If you’re looking to make much-needed renovations or just want to spruce up your property, you might want to consider a home improvement loan.

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Your home is your castle, so you want to keep it in top condition. Unfortunately, housing upkeep can be pretty costly, and it’s not always possible to make the changes to homes that we may want or need. This is where a home improvement loan comes in handy. If you’re looking to add value to your house or you need to do some repairs, you have a few financing options which can help you get the renovations done while paying back the loan amount over time.

Compare home improvement loans

Name Product Interest Rate From Effective Interest Rate Minimum Loan Amount Maximum Loan Amount Loan Tenure
HSBC Personal Loan
Up to 7 years
Apply by 29 February 2020 and get a promotional interest rate from 3.7% p.a. (EIR 7% p.a. is only applicable to customers with annual income of at least $80,000, and tenor between 3-7 years) and receive S$108 cashback plus S$88 processing fee waiver. T&Cs apply.
Standard Chartered CashOne Personal Loan
Up to 4x fixed monthly salary, subject to a cap of S$250,000.
1 - 5 years
Receive up to S$1,088 cashback and S$160 Anniversary Cashback on your approved loan. Ends 31 March 2020.
Citibank Personal Loan
Up to 5 years
Receive cash starting at 4.55% p.a. (EIR 8.5% p.a.) on a 36-month loan tenure.

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What types of home improvement finance are available?

If you’re looking to improve or renovate your property, you have a few different options when it comes to financing. Here are a few loans you might want to consider:

  • Unsecured personal loan. An unsecured personal loan is simply a loan that you can use to finance anything you like, such as a holiday, a car or home improvements. These loans usually come with higher rates and fees than other loans because there is no collateral attached to these loans and they are a risk for the lender.
  • Secured personal loan. A secured personal loan lets you borrow money by putting up an asset as a guarantee. If you’re looking at doing improvements on your home, you can attach your house as security, or if you have a mortgage you can use the equity in your house as a guarantee. Just remember the amount of equity you have has to be more than the loan amount.

How you can compare renovation loans

Home improvement loans have a few common features that you can use to compare competing loans.

  • Loan type. The type of loan you decide to go with should meet your needs and situation. For example, if you have a high-interest rate on your home loan, you may want to opt for a personal loan with a lower rate rather than adding on to your mortgage. However, having only one payment to make might be more convenient to you.
  • The purpose of the loan. Make sure you will be able to access the funds when you need them and that you will be able to use the funds for your renovation. Some loans are specifically designed for renovation purposes and comes with flexible features, so you may want to consider this as an option.
  • Loan costs. Consider your upfront and ongoing fees as well as your rate when looking at your loan costs.
  • Repayment options. You should ensure the lender offers repayment options which suit your desired payment frequency and income. For instance, if you are paid monthly, you may want to opt for a lender who will let you make monthly repayments.
  • Flexibility and extra features. If you are looking for any additional features that are being offered by other lenders, choose a loan that will give you these.

What types of home renovations can you do?

Renovating a home can be a daunting task, given that there is so much you can do. One way to go about this process is to begin by identifying exactly what you want to accomplish, be it changes to styling, structure, or functionality. You can choose to make renovations to your bathroom, to patios, landscaping, or adding new rooms or even changing a home’s heating and cooling system.

The improvement of space and the addition of amenities can include building or improving outdoor living spaces, adding indoor storage space or even relocating or modifying your laundry space. You can also experiment with furniture layouts that can be space-efficient, renovate your kitchen to account for safety and traffic flow or making aesthetic changes to your bathroom.

You can also choose to improve your home’s heating, cooling, and air quality. This aspect can be tricky and involves paying attention to windows and glazing, ventilation, thermal mass, and insulation. You might want to turn to a heating and cooling system that comes with high energy star ratings.

Installing solar or energy-efficient hot water systems can also work well, and if your home doesn’t have suitable solar access, you can think about getting an active solar heating system. Try to improve the flow of natural light, and use LED lighting to replace low-efficiency lighting.

How to make your home renovation pay off

Before you begin renovating your home, establishing the purpose is very important. Do you, for instance, want to renovate your home to enhance your lifestyle? Do you want to make more money from renting it out or do you plan to sell it? While carrying out a feasibility study in the second and third scenarios is crucial, ensuring that you don’t overspend is important irrespective of why you want to renovate.

  • Add value through creativity. Homebuyers pay particular attention to a home’s bathrooms and kitchen, and without spending too much, you can transform a seemingly run-down bathroom or kitchen. When it comes to making cosmetic renovations, it is best to limit to changes that are in plain view.
  • Keep a tab on expenses. This is not difficult if you plan ahead of time and then stick to your plan. When budgeting, take into account the cost of materials as well as labour, and spread your budget suitably across the different spaces that you wish to renovate.
  • Consider DIY. Undertaking renovations the DIY way can help keep costs in check, but make sure you have access to the right tools as well as the required skills.
  • Compare your alternatives. If you take the time to shop around and work on your negotiation skills, you can save money on supplies as well as labour costs.
  • Think long-term. This is particularly important if you’re making changes to the house you plan to continue living in, simply because you’re the one who’ll benefit. Energy-efficient additions are a definite plus, and by opting to go the green way, you can also qualify for certain rebates.

Things to consider

Before taking out a loan to cover the cost of your repayments, it’s important to consider a few things:

  • Can you afford the repayments?

To calculate the cost of your repayments, you not only need to consider the interest rate you will be charged with the loan, but also any ongoing fees or charges. Look at how long you are taking the loan out for, the repayment frequency you have chosen, any monthly or annual fees and the rate you will be charged. This will give you an idea of the true cost of the loan and your repayments.

  • How flexible is the loan?

Flexibility is another important consideration. Personal loan terms are generally between one and seven years, and as this is a significant amount of time you want to ensure that the loan can be accommodating to any change in your circumstances. Look out for things such as being able to make additional repayments, the ability to close the loan early or to change the loan terms.

  • Have you applied for the right amount?

This is an important question, not only because you could borrow too little mone,y but also because you could borrow too much. The principal amount you borrow from the lender will have an effect on your interest and could cost you quite a bit of money if you calculate the loan amount incorrectly. If you borrow too little, it may be difficult to access additional finance to complete your home improvements.

How to apply for renovation loan

To apply for a home improvement loan you can compare your options using the table above and click the “Go to site” button if you find a loan you want to apply for. This will take you through to the lender’s website where you can fill out an online application form.

To take out a personal loan you will need to be over the age of 21, a citizen or permanent resident of Singapore, and depending on the lender you will most likely need to have a good credit rating. When you apply, you will need to provide your name, address and proof of your identity. You will also need to provide details of your income, your employer’s name and contact details, as well as information regarding your assets, debts and liabilities.

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