All You Need To Know About Renovation Loans In Singapore

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*This article is done in collaboration with Lendela, together we attempt to help parents better understand finance for the family. 

There is one unique thing that differentiates a responsible homeowner from others who are not ‚Äď innate love for the house. When you spend years in a house, there is no doubt that you develop special connections with it, so strong that you want it to reflect what you stand for. This is why you need to maintain the home in pristine conditions.

If the maintenance tasks are minor, you can fund them from personal savings. However, if the renovations are major, but you do not have ample cash, one of the best options is getting a renovation loan. Here is our comprehensive guide to the best renovation loan in Singapore.

What is a Home Renovation Loan?

A home renovation loan provides homeowners with the money they need to fix their homes. It is an unsecured loan, meaning that you will not need to provide collateral to secure it. Simply put, you will not be putting your house at risk by taking out a home renovation loan.

It is important to emphasise that a home improvement loan is different from home equity and home refinance loans. These loans are more mortgage-loan oriented, meaning that they take longer to repay, involve larger amounts, and are not open-ended. Furthermore, they are also harder to obtain compared to home renovation loans.

Lenders require you to be specific about the targeted maintenance project before approving a home renovation loan. For example, are you interested in repainting the house, fixing the roofing, redoing the electrical system, creating new extensions or plumbing lines? The amount you can borrow for renovation works varies from one lender to another, and it is advisable to compare different offers.

What Can You Use a Home Renovation Loan For?

Most homeowners go for renovation loan in Singapore to handle the following major repair and restoration works in their premises:

Fixing Crumbling Roof

If you notice that the roofing of your house is damaged, it is crucial to fix it urgently. Because the roofing is the first layer of protection from the elements, it can get damaged pretty fast from exposure to the elements. Over the years, the expansion and contraction of roofing material, especially along the joints, can create gaps and accelerate the wearing.

You can also tell if the roofing is damaged by checking for leaks. The problem starts on loose joints, and the leaking water causes the wooden material to rot. If not fixed promptly, leakage can cause the roof to crumble. If the water gets inside the house, it can also damage the ceiling, shelves, clothing, documents, and electronics. Therefore, it is important to ensure it is fixed as immediately as possible.

If the roofing was done poorly, it could easily get damaged even before reaching the end of its life. For example, although asphalt shingles are designed to remain intact for approximately 20 years, they can start crumbling within a few years if they were done poorly.

If you notice signs of crumbling, leakage, or gaps on your house roofing, make sure it is checked by a professional to establish the extent of the damage. Then, go for a renovation loan Singapore to have it fixed.

Restoring Dilapidated Flooring

One of the parts of your house that endures endless stress is the flooring. From regular scrubbing to pressure from shoes and furniture, the pressure subjected to the floor can easily damage it. The bathroom and kitchen floors are usually the first ones to show signs of deterioration.

If you notice signs of strain, crack, or dent in the floors of your home, it is important to fix them immediately. When you decide to renovate the floor of the home, it is a good opportunity to change the vibe of the house. Here are some of the things you need to think about when looking for a home renovation loan to improve the floors.

  1. If your floor is exposed to moisture, consider using water-resistant options, such as vinyl and tiles.
  2. Install floors that can withstand constant wear and tear in high-traffic areas.
  3. Factor the occupants of the room when renovating the floor. For example, laminate flooring works best for kids' rooms, while those with better traction are recommended for the elderly's rooms.

Repainting Worn Out House Walls

If your house’s painting has started fading off because of dirt, sunlight, or chemicals, repainting it can be an expensive undertaking. Using an in-house renovation loan Singapore makes it possible to buy quality paints and work with professionals to give your walls a fresh look.

Notably, it is important to paint the wall when it starts showing signs of fading to prevent chipping out. If you do not do it immediately, a lot of pre-painting work might be required because of excessive peeling. The effect will be a higher cost of repainting the walls.

Expanding Your House

Did you buy a one-bedroom house, but the family has now grown and needs more space? Are you thinking of renovating the house to include new facilities, such as patios, garages, or home office? If the answer is yes, a home renovation loan will come in handy to help you create the new additions.

When expanding your house, it is an excellent opportunity to improve the interior and exterior décor and as well as increase its value. If you are looking forward to selling your home, expanding it can make it more attractive and fetch a higher price tag.

Repairing Damaged Plumbing System

The plumbing network helps to move clean and hot water in your house. It also directs dirty water from the house to the septic or municipal drainage system. Damages such as blockages or leakages can compromise the efficiency of the plumbing system or damage other facilities.

Although fixing plumbing line problems can be expensive, it is important to do it without delay to avoid further damages. For example, if you fail to fix leaking water lines, it can cause flooding in the house.

Fixing Damaged Electrical System

If your house's electrical system is faulty, it can compromise your ability to use all appliances, such as refrigerators and air conditioning systems. If you fail to address the problem urgently, it can even cause a fire in your house. The main challenge with electrical work is that it requires a skilled workforce, which can be pretty expensive. This is why considering an in-house renovation loan Singapore would come in handy because you finish the renovation and get to repay the loan in instalments.

Remodelling the House

Does your house look at its best? To improve the outlook of the house and raise its value, consider remodelling different areas. For example, you can remodel the kitchen cabinets, wardrobes, or bedroom to make the house look more appealing. A carefully remodelled home can help your house to sell faster and fetch a better price on the market.

Fencing and External Works

When someone comes to your home, the first thing that captures the mind is the fence, and you want it to be as impressive as possible. The fence also helps to improve the privacy and security of the house. A renovation loan Singapore can also be used for repairing damaged fences or installing a new one.

If you are installing a new fence or changing the current one, ensure to select a durable model that can withstand the forces of the elements outdoors. A better and more durable fence can also help to reduce the cost of repairs in the long-term.

Qualification for a Home Renovation Loan Singapore

When you decide to apply for a renovation loan Singapore, whether for roofing or plumbing line repair, the first step should be checking eligibility. Although the criteria for eligibility might vary depending on the selected lender, here are the main things that you might be required to meet:

You Must be the Property Owner

Renovation loans in Singapore are only available to property owners. So, whether you are planning to renovate a bungalow, condominium, apartment, or any other type of residential property using a renovation loan, the first step is providing proof of ownership.

You are a Singapore Resident

Renovation loans Singapore are mainly provided to Singaporeans but if you are a Permanent Resident and also own a house in Singapore, most lenders will also be willing to lend you money for renovation. Furthermore, you must be between 21 and 61 years of age.

Meet the Requirements for Minimum Annual Income

Most financial institutions and lenders in Singapore will only agree to provide in-house renovation loan Singapore to homeowners who meet the minimum annual income of $19,200. However, there are some instances when lenders might have higher limits of up to $30,000.

Have a Good Credit Score

Because renovation loans in Singapore are unsecured, lenders rely on credit rating to determine the creditworthiness of borrowers. If you have a low credit score, the renovation loan is likely to attract a higher interest rate because you will be considered a high-risk party. As such, you might want to work on improving the credit score before applying for the renovation loan.

What You Need to Think About when Applying for a Renovation Loan

If you want to apply for a renovation loan, it is important to look at it like other types of loans. This implies that once you get the loan, the journey of repayment commences. Here are the main things to think about when applying for a renovation loan.

Interest Rate

After a renovation loan is approved, you will be required to repay the principal plus the interest. Therefore, you should target identifying a renovation loan with a low-interest rate to keep the overall cost of credit low. Comprehensively review and compare the interest rates from different lenders and work with the more affordable one

The Length of Loan Repayment

In addition to the renovation loan interest, you need to also think about the loan tenure. The lovely thing about the loan is that you get funds to do a major renovation, but payment is broken down into monthly instalments. Although longer loan tenure is likely to pull down the monthly payment, it will also increase the total amount payable. So, consider going for a loan tenure that will not strain your finances.

Your Capability to Repay the Loan

As you think of applying for a renovation loan, it is important to answer the question, ‚ÄúWhat can you afford?‚ÄĚ Even when the lender is willing to release more money, your focus should be on the¬†ability to repay. Factor other financial needs, such as rent and utility bills, to determine the overall amount that you are willing to commit to loan repayment. This will be a great time to relook at your monthly budget to determine what you can repay without causing a lot of strain on your finances.

When evaluating your ability to repay a renovation loan, it is also important to consider other debts that you are repaying. Do you have a mortgage or credit card loans? Try to limit the amount of income going to pay debts to about 35%.

Using the Renovation Loan to Improve Your Credit Score

Although you are adding another debt, it can actually work to your advantage by improving your personal credit score. Credit reference agencies use multiple parameters, including your ability to repay loans on time and credit mix.

If you stay focused on clearing the renovation loan by paying all the monthly instalments on time, it might help to raise the credit score by a few points. Also, if you already have other types of credit, such as credit card loans, securing a renovation loan will enrich the credit mix and improve your credit score.

Special Tips for Identifying the Best Renovation Loan Provider in Singapore

Now that you know the things to think about when looking for a renovation loan, the next thing is identifying a good lender. The best renovation loan provider in Singapore should have the following:

Low-Interest Rates

If your loan gets approved, you will be required to repay the principal plus the interest. The best loan provider should have low-interest rates to make the loan affordable. Because a renovation loan is unsecured, the interest rate will be pegged on your credit score and ability to repay. Lendela will make sure to help you compare interest rates for the offers that you receive, so that you can choose the lowest one. Where possible, negotiate with the lender to have the interest revised downward.

Fast Processing for Loans

If you are applying for a renovation loan in a hurry, look for the lender who can process it as fast as possible. For example, if your roofing is damaged and needs urgent repairs, a lender that is able to assess your application, book you in for final approval, and release the funds within a short period of time (preferably within 24 hours), is to prefer.

Good Customer Support

One indicator of a good financial organisation is outstanding loan agents or customer support. The best renovation lender should, therefore, have professional support helping applicants go through the application process in a fast and hassle-free way.

Remember that Lendela’s experienced Customer Service Team always is available to help you no matter which lender you select to get your renovation loan from. We will stay by your side and assist you with any type of inquiry, from initial application to disbursement.

Reading Reviews from Past Clients and Experts

One of the best ways of identifying the best renovation loan provider is checking what past clients had to say. You can narrow it down to the lenders you are choosing between and visit their client feedback pages on their websites. Past users provide a lot of information that can help you to make the decision on which lender to actually borrow from.

When reading feedback from past users, it is important to be careful because some organisations might try to influence what people write. So, even when the past users recommend a specific loan, you need to carry due diligence.

Lendela is only partnering with licensed lenders and banks that have the same view of customer service as we do. We are constantly keeping a dialogue with our partners to make sure that the application process goes smoothly and that each customer gets the service they need.

Ability to Refinance the Loan

If your credit score improves significantly after getting a loan, some providers of the best renovation loan Singapore may agree to refinance it. Refinancing allows you to enjoy lower interest rates and make some savings on loan repayment.

Steps Needed to Get a Home Renovation Loan Singapore

The process of applying and getting your home renovation loan approved in Singapore may be a lot easier than you anticipated. However, it is important to ensure you do your research well and follow these six main steps:

Be Specific about Your Need for Home Renovation Loan

Improvement loans in Singapore are tied to specific maintenance projects, such as roofing repairs or building an extension. Therefore, it is advisable to make your loan application as specific as possible about the project the cash will be directed to (this information will be provided in the application form on You might even consider providing a checkup report and recommendation for repairs. With such details, the lender will be left in no doubt that the money will go to improve the value of the house

Specific Amount Needed for Renovation

Although most lenders are likely to have dealt with renovation loans before, the associated costs of maintenance are likely to vary from one house to another. Try as much as possible to capture the cost renovation for your house.

The best way to go about it is by doing your homework well to determine the actual cost of the anticipated repairs. For example, if you need to redo the house wiring, consider working with a technician to get a quote for the job. To increase the chances of having the renovation loan approved, ask the technician to provide a further breakdown so that the cost of materials and labor are easy to identify.

Check Your Credit Score

As we highlighted earlier, renovation loans Singapore are unsecured forms of credit. Therefore, the approval is also pegged on your credit score. As a result, it is crucial to ensure you check your credit score and ensure it is okay before making the loan application.

Because your credit score is calculated by credit reference agencies that rely on third-party organisations, such as lenders and banks, it is not uncommon to find the report having some errors. Whether the errors arose from data entry or omission, checking the report thoroughly can help to identify them. Then, ask the credit reference agency to correct the information on the report and recalculate your score.

Check Offers from Different Lenders

To get the best renovation loan Singapore, you should compare offers from different lenders to identify the best option. The best home renovation loan Singapore should be easy to apply and have low-interest rates. Furthermore, it should not come with hidden costs that can increase the amount payable. Use our service to easily compare multiple renovation loan offers online in your Lendela account. What offers do licensed moneylenders have? How do they compare with those from banks, and other leading lenders in Singapore?

Prepare and Present Your Documents

After applying for a renovation loan Singapore via Lendela, some lenders may require you to submit certain documents, including the following:

  1. A copy of your original National Registration Identity Card.
  2. A statement showing your contribution to the Central Provident Fund (CPF) for at least six months preceding the date of the renovation loan application.
  3. Your three (3) latest pay slips.
  4. Proof that you are the owner of the property.
  5. A quotation from a contractor who will handle the renovation project when the loan is approved.

Get the Loan, Renovate Your House, and Start Repayments

Once the home renovation loan Singapore is approved and released, use them to renovate the house and make it the paradise of your dreams. As you improve the house, it will also be the best moment to start repaying the loan. Make sure to stick to the agreed monthly payments to avoid getting penalised and damaging your credit score. Take note that even the consideration for early repayment is also likely to attract a penalty for early payment.

The outlook of your home should give a reflection of the owner. So, whether it is the damaged roofing or plumbing system that requires major repairs,¬†the best renovation loan¬†Singapore is all that you need. The loan allows you to restore the home into the paradise of your dreams as you repay in instalments. If you are planning to sell the house, the loan will also come in handy to help improve its value. See ‚Äď why sell it the way it is when it can fetch a lot more after renovations?

Use the above guide to identify the best renovation loan provider via Lendela, apply with us in a few minutes and get the loan approved. Then, use the funds to make your home more enjoyable to live in.


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This article is prepared by

Jiarong Yu
Daddy to 2 adorable little ones. Misses them the moment they are not around, regrets missing them the moment they are around.

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