Dear readers, thanks for dropping by. Kindly note that I have migrated all these posts to my new blog All Things Cozy and Homely . I will blog at the new site from Jan 15 onwards.

Wednesday, June 27, 2012

Renovation Loan FAQ

Renovation Loans FAQ

1. Is it advisable to take on a Renovation Loan?
As pointed out in my Will Renovation Raise your Property Value post, it is not wise to view renovation as a return on investment (unlike Study or Home Loan). Thus, I will advise you not to take on a Renovation Loan. However if you have to, keep in mind to keep the loan amount small and manageable. 

2. What is the minimum and maximum renovation loan amount?
Minimum loan amount: SGD $10,000
Maximum loan amount: 8 times of your monthly income or SGD$30,000 (whichever is lower). 

3. What is the minimum and maximum loan tenure?
Minimum loan tenure period: 1 years
Maximum loan tenure period: 5 years

4. What are the conditions to be met before I can qualify for a renovation loan?
Nationality: Singaporean or a Singaporean PR,
Age: Between 21 to 55 years
Minimum Income: SGD $24,000 p.a.*

* Note: If you do not meet the annual income of $24,000 fret not. To meet the minimum income criteria, you may apply for the loan with a joint applicant (who must be related i.e. parent, sibling, child or spouse).

5. What is the lowest interest rate that I might be looking at?
The renovation loan bank rates fluctuates from time to time. Check from the list of Singapore banks * that offers renovation bank loans from below.
1. DBS
2. Maybank
3. Standard Chartered
4. RHB Bank
* Note: You may wish to look at the other personal loans that banks offer.

6. How long do I wait before I can re-apply after being rejected?
Waiting period might take up to 6 months.

7. What are the hidden costs of the bank loan?
After approval, there is a processing fee (of 1.0% of the loan amount) which is to be paid upfront upon signing the Letter of Offer. By signing the letter, you have accepted the approved loan amount and the terms and conditions. There are also a penalty costs if you repay your loan earlier than the loan tenure or when you switch banks.

8. What are the Documents required for the loan application?
For salaried person: Latest computerized payslip and CPF statement (for last 6 months) or latest
                                 Income Tax Notice of Assessment
For self- employed: Latest CPF statement (for the past 2 years) or Income Tax Notice of Assessment 

Photocopy of NRIC (both sides)

Proof of ownership of property to be renovated
Original contractor's quotation / invoice duly signed by customer and contractor

Completed renovation loan application form duly signed by applicant(s)

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