Getting a home renovation loan in Singapore is a common concern, for those just moving into their flat or condo. Unfortunately, many people can’t afford to pay for their renovations all at once – for such cases, home renovation loans provide a simple form of financing:
Three common routes differ in cost, flexibility and how the funds may be used.
Some homeowners may combine funding sources—for example, using a bank renovation loan for eligible works and paying for furnishings or any remaining shortfall separately. Before doing so, compare the total cost and ensure the combined repayments remain manageable.
For homeowners, renovations allow you to personalise a home to your needs. For example, some home owners may not like HDB’s new “open kitchen” concepts; they may want to partition it off to form a separate dining room. Buyers who have purchased a resale flat or condo often prefer to personalise it, rather than keeping the style of the previous owners.
Sometimes, renovations are not a matter of choice. For example, an old resale unit may be in a state of disrepair, and need complete renovations. Or if you’re looking to rent out a property, or sell it, basic renovations can help to improve its attractiveness to tenants or buyers. Well thought-out renovations can raise or help maintain your property value.
On the downside, renovations can get expensive. Most three-room flats cost at least $10,000 in renovations, with five-room or larger flats typically costing twice or three times more.
Renovation costs vary considerably by flat type, size and scope of works, and quotes for the same unit can differ significantly between firms.
The other downside is that renovations are inconvenient – you may not be able to stay in, or rent out, the property when certain renovations are underway. It can take a few months to complete, so you may need temporary accommodation elsewhere.
There are a few tricks you can use, to try and keep the cost of renovations down.
The most common one is to renovate “room by room”. For example, you might renovate the kitchen and master bedroom first. A few months later, when you’ve saved more money, you move on to renovate the toilets, and then the dining room and living room. This doesn’t make your renovations any cheaper, but it does help to stagger the cost, and maintain your cash flow.
Another method is to use a contractor, rather than a full suite Interior Design firm. Yes, there’s a difference: An Interior Designer (ID) draws up the concept, plans, designs, etc., while a contractor’s role is to execute those plans.
But if you want to save a bit on renovations, you can elect to skip the ID and go straight to a contractor. Some contractors are experienced enough that they can help you with the design element as well.
A third method is to use substitute materials with the same function or aesthetics. For example, these days you can get vinyl flooring that has the colour and even the texturing of wood; this is much cheaper (and longer lasting) than actual parquet flooring. Your contractor or ID can advise you on alternative materials.
Even with all the above methods, many people in Singapore cannot pay the full cost of renovations, all at one go. You will typically need a home renovation loan, or affordable personal loans.
There are three basic ways to get renovation loans:
● Bank renovation loans
● In-house financing from design firms / contractors
● Non-bank lenders
Note that these are not the same as personal loans. Bank renovation loans are typically capped at $30,000, or six months of your income, whichever is lower. (And in case you’re wondering, yes, this is why so many design firms seem to like projecting budgets near this amount).
Bank renovation loans typically have interest rates of up to five per cent per annum.
This is a good option if you can qualify for it; but note that $30,000 is not an especially high limit, for a five-room flat or condo. There is a chance that you will need more than the bank renovation loan can provide.
Also, note that the bank renovation loan cannot be used for furnishings (e.g. sofa sets, beds, and TVs). Some banks may have an additional furnishing loan you can take, but this varies greatly between them.
Some ID firms and contractors provide in-house financing for clients. They can draw up the terms as they like, so you need to be sure to read it all carefully. Interest rates are typically higher than the bank, but there’s no “typical rate” as it really depends on which firm you approach, what deals they’re willing to give, etc.
Worth checking before you sign: who is actually providing the credit. If financing is arranged through a third-party lender, the loan terms are set by that lender rather than the contractor or interior designer. If the provider is a moneylender, verify that its business name, address and website appear on the Ministry of Law’s Registry of Moneylenders.
Non-bank lenders, such as Friday Finance, can provide loans for your renovation. While rates may be higher than the bank (around one per cent per month), repayment terms are also more flexible.
One viable strategy is to use the bank renovation loan first – but if that proves insufficient, you can borrow the difference you need with a short-term loan from non-bank lenders like Friday Finance.
(Or you can use the bank renovation loan for your renovations, and take a non-bank loan to cover the cost of your furnishings).
A renovation loan from a licensed moneylender is a personal loan, so the same statutory limits apply:
Unlike a bank renovation loan, a licensed moneylender loan is not restricted to renovation works, so it can be used for furnishings. The amount available is subject to the Ministry of Law's aggregate borrowing limit, which applies across all licensed moneylenders combined and is based on annual income and residency status.
Working out what the shortfall would cost to finance? Try the Friday Finance loan calculator →
Ps. Are you a new couple thinking of your first home?
Friday Finance can also provide marriage loans, to help you afford an ideal dream wedding and dream house. Contact us to get flexible, low-interest financing today. Friday Finance will also refund half the administrative fees on your loans for prompt repayment, allowing you to enjoy more savings.
You can also read more about the Friday Finance wedding loan and the renovation loan directly.
Friday Finance is a licensed moneylender listed on Singapore's Ministry of Law Registry of Moneylenders, operating as the consumer-lending brand of IFS Consumer Services Pte Ltd (licence No. 85/2026), a wholly-owned subsidiary of SGX-listed IFS Capital Limited.
Friday Finance is the consumer-lending brand of IFS Consumer Services Pte Ltd, a licensed moneylender (licence No. 85/2026) regulated by the Registry of Moneylenders, Ministry of Law, Singapore. Loans are subject to credit assessment and approval. Unsecured borrowing limits across all licensed moneylenders are set by the Ministry of Law based on annual income and residency status. Interest rates, fees and repayment terms will be stated in the loan agreement. The Effective Interest Rate may differ from the stated interest rate as it accounts for factors such as fees and the repayment schedule. Borrow responsibly.
The regulatory information in this article is drawn from the following official sources. All figures are subject to change; readers should verify current information directly with the relevant authority.
