Will the outgoing money flow never end?! You’ve already spent all that cash on your house, but now renovations beckon. What do you do? Renovations could easily set you back S$20-100,000. As we’ve seen over the last year, prices just keep increasing. Even with the current pandemic (when you might have expected prices to fall), labour and material costs have gone up and time required to get things done has increased.
Saving up for your renovation sounds like the proper thing to do. However, reality shows you that the more time you spend saving and waiting, the more prices will continue to rise.
What about your accumulated CPF? Unfortunately, the Singapore government does not allow the use of CPF for renovation or repairs.
But fret not: we have bank loans. Many of Singapore’s leading banks offer renovation loans, with interest rates ranging from 2.06% to 4.88%. (Figures were correct at time of publishing, but it’s always a good idea to check rates directly with banks or a Website such as iCompareLoan, www.icompareloan.com.)
1. OCBC Renovation Loan
OCBC provides one of the lowest minimum loans, at $5,000. Their maximum loan is $30,000 (or 6 times your monthly income, whichever is lower) and they charge a processing fee of 1.5% of the loan amount.
2.DBS Renovation Loan
Probably one of the most popular banks used by Singaporeans, DBS offers a minimum loan of $10,000 and a maximum of $30,000 (or 6 times your monthly income, whichever is lower). They also charge a processing fee of 1% of the loan amount and 1% for insurance.
3.Standard Chartered Personal Loan
Standard Chartered provides flat interest rates, which might interest you if you have a longer tenure. If your tenure is below 12 months however, there is 0% interest rates and low processing fees.
4.HSBC Personal Loan
If you’re a high roller earning more than $120,000 a year, you qualify for a loan up to 8 times your monthly income at HSBC. They also allow for longer tenures of 7 years.
With all these possibilities, the thought of renovation might not be so scary. It might be better to bite the bullet now and get it done before moving in rather than moving in and having to break down things, hack walls and repair damages from things falling from the ceiling. Talk to your banker today to see which plan works best for you. Enjoy your space and the time you have with your loved ones. Life is short! Get a loan.