Applying for a renovation loan in Singapore from a licensed financial institution can be done nowadays online, from the comfort of your home. Of course, the comfort of your home can be highly improved with this type of loan. Getting the extra garage you always wanted or repairing your roof because of flooding are common aspects of house improvements, which qualify for this loan. This article talks about how a simple renovation loan application stands between you and your dream home and what steps are needed to get the loan you need.

Is a Renovation Loan Suitable for You?

First of all, you need to ask yourself some questions to see if this type of loan is suitable for you.

Immediate Needs and Purpose of the Loan

What does immediate needs mean when it comes to your house? Immediate needs are urgent situations that need to be resolved fast. So, time is essential for this issues and you know if you have an immediate need for a loan, if the situation that is happening is urgent and needs to be taken care of immediately or as fast as it can be. For example, an urgent need is when you have to repair your house roof because water is leaking inside and this can affect all the furniture, goods and other assets inside the house.

In the category of urgent needs, you can think of other examples where different issues must be fixed with no delays. For instance, you just bought a house with no heating systems and winter is a month away. Or, it has no cooling systems and summer is one month away. Both situations must be resolved fast. Other examples could be the fact that you stairs broke, your basement was flooded, a wall collapsed, or something exterior caused damage to your fence, the electrical system failed and you have no electricity and you need to redo all of it.

Each scenario requires immediate attention and action. So, ask yourself if you have an immediate need and if the answer is yes, then a renovation loan in Singapore might help you. But, keep in mind that although the purpose of this loan is to help you resolve an immediate situation, you may rush into things and forget to analyze the approximate costs, resulting into a situation where you could borrow more than you need.

Long Term Needs and Purpose of the Loan

If you don’t have an immediate need, then you have another need for sure; but it doesn’t stress you and time is not the villain character. Although a renovation loan application can help you in both cases of personal needs (urgent and non-urgent), the long term needs could be more suitable for a loan, because you can think thought all the details and necessary aspects of your home improvement or desired renovations.

For example, if you want to apply for a house improvements loan and you are not in a hurry, you can think of aspects that you want to improve for your pleasure or comfort. For example, you may want to build an additional garage, finish a basement, change the furniture, repaint the walls, change the windows and doors, build another bathroom, finish building the third bedroom, change the plumbing, change the electrical system to one more costly efficient, etc.

On the other hand, you may want some changes because it could help you increase the value of your property, in case you want to sell it. So, if you have a need that fits into this category (for your comfort or for some profit after selling the house), a renovation loan application is the first step to getting the money that you need.

The Difference Between a Personal Loan and a Renovation Loan

Both types of loans mentioned above have advantages and disadvantages and they differ from each other in certain aspects. The personal loan covers a wide range of personal needs and situations (since its name), such as paying for a medical bill, prepare for a wedding, a funeral, and so on, while the renovation or house improvement loan is used specifically for house related issues and needs.

Although both loans can be categorized as personal loans, the renovation one is a little more advantageous for what the interest is concerned. So, the first difference is the one about the interest rate, where the personal loan has a little higher interest and the renovation one, a lower interest rate. The last one offers better terms of repayment and you can get a better period of time to repay the loan, different from the personal loan, even thought sometimes, the period could be the same.

How Does the Renovation Loan Application Work?

If you want to apply for this type of loan in Singapore, there are some general and special conditions that you need to check before in order to get the loan. The process of applying is pretty simple and you can do it online, just by filling in all the information required. The general conditions are that you have a stable job, thus being employed, that you are a Singapore citizen, have a valid ID or passport, provide a residency proof, such as utility bills.

The special condition is to have a situation where you need to access the loan for the house, by doing the improvements or the repairs. So, it is a special condition because it is related to the house and the needs that you have around this problem. It wouldn’t be a renovation loan application if it was for buying a car, repairing a motorcycle, or buying a boat. Although personal needs, they are not related to house fixing, improvements or repairing.

Conclusion

If you are considering a renovation loan application, but you are not sure where to start, ask yourself some key questions. Is your need immediate and if not, does it help you by any means, repairing or improving the living conditions? Have you prepared an approximate list with what you need to buy or pay and have an amount of money in mind that you need to borrow, avoiding the risk of overborrowing? Depending on your answer, you will know what to decide.

Publication: 15 May 6:58