Most of the time, moving into a new home requires some work to make it absolutely yours. Renovations are simply a part of home ownership but are usually expensive, making them a major financial undertaking. This is especially true if you are a young homeowner who just purchased your first home. Fortunately, with some smart planning, you can make renovations a component of your home financing package.
So, instead of using your hard-earned savings or waiting until years down the road to carry out your home renovation project, you can consider taking out the money upfront through easy cash loans referred to as ‘renovation loans’ – these loans are a viable option for financing home renovations. To understand more about them, read on as this article discusses the most important things you need to know about renovation loans and borrowing money from licenced money lenders.
What is a renovation loan?
A renovation loan is a form of unsecured loan specifically catering to the financial needs of homeowners planning to carry out a renovation or home improvement project. This type of loan provides homeowners with enough to make desirable or necessary renovations to their homes or at least access to the credit they need to make those changes.
Although they do not require collateral, renovation loans are relatively more cost-effective than other unsecured loans. However, keep in mind that renovation loans may only be utilised to pay for approved renovation projects, which will be determined and verified by your money lender.
What is needed to apply for a renovation loan?
In Singapore, a renovation loan can only be approved with an official quotation. To obtain a loan successfully, you first need to reach out to a contractor or an interior design company to discuss the renovation works you want. After a thorough discussion, you should secure an official quotation for the home renovation project, which must be submitted to your money lender with your loan application.
Now, once your renovation loan has been approved, the chances are that you will not receive the funds directly into your account. Instead, your money lender will likely prepare the cashier’s orders on your behalf, which will be passed to your contractor or chosen interior design firm as payment. Usually, a maximum of four cashier’s orders are given. This allows you to pay your contractor in phases rather than all in one go. You can require extra cashier’s orders if you wish to split your payments up further.
How much can be borrowed via a renovation loan?
The amount of money you can borrow via a renovation loan can reach up to six times your salary per month, which is usually capped at a maximum amount of S$30,000. This limit is applicable even if you are making a joint application with your spouse, child, parent, or sibling. In joint applications, you can borrow a maximum of 2 x 6 times the lower monthly income of the two applicants, but the overall cap is still S$30,000.
To be eligible for a renovation loan, you must pass certain requirements, which often include age (at least 21 years old), annual income, and property ownership or authorisation from the homeowner. Citizens, permanent residents, and foreigners who reside in Singapore are qualified to apply for renovation loans. However, some requirements may differ.
Making renovations or home improvements can be costly. Luckily, renovation loans are available to make your home renovation project less financially burdensome. Taking out this type of loan will significantly help you finance all the necessary or desired improvements in your home without necessarily exhausting your savings. Especially if you are a first-time homeowner, a renovation loan can truly be your financial saviour!
Should you require a licenced money lender to provide you with reliable instant cash loans for any financial needs, Orange Credit is the loan expert that can help you! We offer a variety of excellent loans with fast loan approval in Singapore, including personal loans, business loans, payday loans, bridging loans, and debt consolidation loans. If you are specifically planning to renovate your home, our loans can help turn your plans into reality! Feel free to contact us today to find out more about our offers.