How Long Does A Renovation Loan Take to Get Approved in Singapore

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Written By Loanbuddy Singapore
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How Long Does A Renovation Loan Take to Get Approved in Singapore

The approval time for a renovation loan in Singapore can vary depending on several factors. Typically, it may take anywhere from a few days to a few weeks for the loan to get approved. Factors that can affect the approval duration include:

Documentation: The time taken to gather and submit all required documents, such as income proof, identification, renovation plans, etc.

Lender’s Process: Each lender has its internal processes for reviewing loan applications. Some might have faster approval processes than others.

Loan Amount: Larger loan amounts might require more scrutiny and thus take longer for approval.

Credit History: If your credit history needs further evaluation or improvement, it might delay the approval process.

Property Assessment: For certain loans, an assessment of the property being renovated may be necessary, which could add time to the approval process.

To speed up the approval process, ensure you have all necessary documents prepared and in order when applying. Additionally, choosing a reputable lender with a streamlined application process can also help expedite approval.

It’s always advisable to consult with the financial institution you’re considering for the renovation loan to get a clearer timeline based on their specific processes and your circumstances.

Defining Renovation Loan: Features and Mechanics

Renovation loans are special-purpose loans meant for financing your home renovations applicable for both new and existing homes. Like any other loan in Singapore, this loan has a loan tenure of one to five years, during which you must repay the principal amount and interest to the lender. The renovation loan amount is normally $30,000 or an amount equal to six times your annual salary.

A renovation loan differs from a personal loan; the interest rate is a tad lower — somewhere in the range of 4% to 6% per annum. Your contractor might even bust this budget. If this happens and you have no cash to pay, you’ll need to get a high-interest personal loan to cover the excess.

With this lower interest rate comes certain restrictions, such as restrictions on what kind of enhancements you can use the renovation loan to pay for, and the fact that the money will be disbursed to your interior designer or contractor directly.

When comparing different home loan packages, be sure to check if there are processing/handling/admin fees charged on the renovation loan amount. Banks can charge extra if your loan needs to be disbursed in stages or to multiple vendors.

Check the following steps while applying for a Renovation Loan

The process of applying for a renovation loan depends on the bank, and the requirements for approving renovation loans in Singapore vary. Some banks require a very high credit score, and others are willing to approve applications for those with lower scores. However, here are the common steps when applying for a personal loan in Singapore:

1. Identify a Good Bank

This is probably the most important step when applying for a renovation loan in Singapore. Banks and financial institutions are always trusted options. Beware of falling into the hands of loan sharks.

Having a clear idea of your renovation budget is a good start to making sure you do not take up a renovation loan amount that will take a heavy toll on your finances. Your ability to comfortably repay monthly installments is a key indicator of whether your repayment plan works for your lifestyle. It is also a good idea to check out any promotions the banks may be offering for the best interest rates. 

2. Check the Terms and Conditions

Terms and conditions, such as interest and loan terms, are very important for personal loans or any kind of loan because they define how smoothly you will be able to service the credit. Review the conditions given by the selected banks and choose the one with the best offerings. What is the advertised interest rate of the loan? What about the APR? This might also be a good time to use a loan calculator in Singapore to determine how much you will be required to pay per month.

3. Follow the Banks’s Recommended Method of Loan Application

To apply for a renovation loan, banks require people to submit an assortment of documents, which they use to determine whether to approve the credit or not. In most cases, this involves filing a lengthy loan application and attaching documents such as bank statements for the last 6-12 months. A quotation from the contractor who will repair the house will also be required.

4. Submit All the Required Documents and Wait for Loan Approval

Once you submit the documents, wait for the loan to be approved. Remember that it can also be rejected if you do not meet the requirements set by the bank. For example, some banks might decline the loan application if your credit score is too low or believe you might be unable to pay. If the application is rejected, you have to look for funds elsewhere. What to know before getting a renovation loan.

Hence, it would be wise to select a loan package that fits your needs, and affordability to ensure you can pay off the loan promptly to avoid these fees.

 You can check and compare the mortgage rates and home loan rates currently offered by the major banks in Singapore here.

 Eligibility criteria for Renovation Loans

Age and income eligibility requirements differ from bank to bank but in general, all applicants have to be Singapore Citizens or Permanent Residents, aged 21 to 65 years old. 

You have to either be the property owner or a family member (parent, spouse, child, or sibling) who has the owner’s consent. 

For Single Applicants (Online Application)

Prepare the following documents to be submitted along with your application:

  • Requirements for Renovation Quotation
  • Requirements for Income Documents
  • Requirements for Proof of Ownership

Average Cost of Home Renovation Loan in Singapore 

After the loan is approved, a handling fee of 1% of the approved loan amount and insurance

premium of 1% of the approved loan amount will be payable and deducted from the approved loan amount.

In addition, fees would also be incurred in the event of cancellation, pre-payment, and late payment with the fees shown in the table below:

Cancellation Fee: 1-2% of the approved loan amount

Pre-payment Fee: 1-2% on the amount prepaid

Late Payment Fee: Generally, it is S$60 for each month or part thereof during which any installment and/or interest is not paid. But it varies per bank. Like with POSB/ DBS, the late payment fee is $35 for each month (or part of it) that the installment or interest is not paid. The late payment fee is $80 for both CIMB and OCBC.

Cashier’s Order/Remittance: A fee of S$5 will be chargeable for each subsequent Cashier’s Order (Deducted from your designated loan servicing account). Following that, the loan will be disbursed to the contractors via Cashier’s Order(s) (COs). While the maximum number of COs to be issued is 4, any additional CO after the first will incur a fee of $5 and it will be deducted from your designated loan servicing account.

First Cashier’s Order is free Admin Fee/ Issuance of Cashier’s Order. Varies per bank. With POSB/ DBS, the first cashier’s order is free and for the subsequent ones, a $5 fee will be chargeable. For CIMB and OCBC, the first 3 cashier orders are waived. 

Default Interest: Renovation Loan Board Rate [RBR] + 3% p.a. (min S$20) on amount in arrears.


The lowest current rate for renovation loans at banks is 3.88% per year, or the equivalent of an effective interest rate (EIR) of 4.29%.

Unlike other normal installment loans that banks provide, a home renovation loan’s interest rate is called a “rest rate.” This means that you pay an interest payment on the outstanding balance of your loan. Because the borrower is required to pay the interest and a portion of the principal every month, both the outstanding loan amount and interest payment decrease over time. This allows the borrower to pay down the debt quicker than he would otherwise.

When you see a renovation loan promotion from a bank, consider it carefully before taking up a package. There may be a reduced interest rate, a waiver for the processing fee, or other incentives that can make it seem like the best choice, but it is always best to do a proper calculation and planning to find a comfortable monthly repayment plan for your desired loan quantum, within an acceptable tenure. 

You can find here loans with the best interest rates, repayment terms, customer service, and application process so you can get the best renovation loan to complete your home transformation.

Things to consider before applying for a Renovation Loan 

 In Singapore, the credit score is an important parameter that banks use to gauge the creditworthiness of borrowers. If you have a low credit score, banks view you as a high-risk party and attach high-interest rates to renovation loans. Some will even decline the application.

To improve your credit score, you can: 

1.Get your credit report and correct any errors

2.Pay the outstanding debts before applying for new credit

3.Maintain a good credit mix

4.Avoid making multiple loan inquiries in quick succession

5.Ensure you only borrow what you can repay without causing significant interruptions to your finances.

To determine the amount you can repay comfortably, take a closer look at your monthly budget to establish if there is ample room to accommodate an additional credit. Try to ensure that the amount going to pay your debts does not surpass 30-35%. Therefore, You should work out your sums, budget your renovation costs accordingly, and take up a renovation loan amount that is comfortable for your situation so as not to overstretch your finances.

What can a Renovation Loan be used for?

The loan can be used for renovation in all types of residential housing including BTO, HDB, condominium, and landed homes.

Home renovation loans typically cover the following:

  • Electrical and wiring works
  • Installation of solar panels
  • Built-in cabinets and carpentry
  • Painting and wallpapering
  • Hacking and structural alterations
  • Flooring and tiling works
  • Sanitary fittings
  • External works within the house compound

Please note a home renovation loan does not cover furniture or appliance purchases. 

Benefits and Difficulties of Renovation Loan


If you are looking to renovate your house in Singapore but are short on funds, take out a renovation loan. 

A renovation loan is a financing solution that helps you better manage your cash flow. Its effective interest rate is lower than other common financing options, such as credit cards and personal loans. 

Whether you have recently bought a new apartment, planning to make your home more conducive for hybrid-work arrangements, or are designing a nursery to welcome a new baby, renovation plans might be on your mind.

 A renovation loan is a type of credit that people take when they want to repair their homes, whether it be restoring the rooting, creating extensions, or redoing the electrical network. It is only advanced to homeowners and comes with a tenure of one to five years. The tenure depends on the bank’s assessment of the borrower’s profile, including their ability to repay the loan. Whichever the case, most of us would agree that renovating does not come cheap. A 5-figure sum seems to be the norm, with extensive renovations exceeding $100,000 for some. Here’s when getting a renovation loan can help to improve your cash flow.


When thinking of a renovation loan, the first instinct might be to apply it on your own, but the big danger of this method is the risk of falling into the hands of loan sharks. These are unlicensed loan providers who usually advertise their loans to have low-interest rates but attach very high processing fees. Their methods of recovering money from borrowers may also involve harassment and shaming, which can result in a lot of stress. It’s a challenging game until you repay all the amounts.

 Other drawbacks of applying for a loan on your include:

It requires you to review a long list of individual banks’ rules. If you want to target multiple loan providers, the amount of information that you need to read and understand is a lot.

The process of applying for a renovation loan in Singapore on your own can be lengthy, taking anywhere from days to weeks.

There is a higher risk of your loan application getting rejected.

Types of Renovation Loans in Singapore

Personal Loan for Home Renovation: With personal loans, you can use the proceeds for basically anything. As such, you can use it for home renovation work.

Home Renovation Loans: Unlike personal loans, this type of loan comes with restrictions. You can only use it specifically for renovation work.

Home Equity Loans: With this loan, you will be borrowing against the equity of your home at a fixed interest rate. The amount you can borrow will depend on your property’s market value and mortgage balance.

Credit Lines: A personal line of credit is a type of loan that allows you to draw money from a predetermined credit limit. The interest is charged only on the amount you’ve “withdrawn”.

Tips For Saving Money on Renovation Loans

Taking a renovation loan is no small matter, so here are some tips for reducing the amount of money you’ll end up paying for your renovations.

# 1 Get A Quote From The Same Bank You Took A Home Loan From

If you took a home loan from a bank, you could go back to them and inquire about preferential rates on your renovation loan. This may or may not be better than what other banks offer, but at least you’ll have the best rates to choose from.

# 2 Renovate In Stages

To reduce the total loan amount (and thus reduce the interest you’re paying), you can plan your renovations in stages, starting with the bare essentials.

After that, you can move in and take your time to save up before embarking on subsequent renovation works, such as built-in cabinets, feature walls, and other nice-to-haves.

Granted, this might take more planning and be more inconvenient, but the cost savings might be worth it to you. With this method, you might not need to borrow at all, or end up realizing that you don’t want those extra renovation works after all!

# 3 Source For Cheaper Alternatives

Anything custom will cost more since you’re paying for the workmanship. To reduce costs, you can try to source for off-the-shelf items, and perhaps even defer purchasing them until you save up.

How to renovate without a Renovation Loan?

If you save enough money, you won’t require a renovation loan. Aside from the obvious, here are some practical methods to make your renovation inexpensive without taking out a loan:

Avoid renovation loans by renovating a small portion of your home at a time and paying for it in cash. Plan to pay over six months and then ask for an interest-free loan. For example, if your renovation costs $30,000, charge it to your credit card and apply for a balance transfer loan. Budget $5,000 per month for six months or $2,500 per month for a year at 0% interest and pay an administrative fee for the loan.

Banks offer interest-free balance transfer loans, which allow you to pay off your debt without collecting interest for a certain period. However, the interest rate after this period may be higher than other loans, so make sure you can complete your payments on time.

When applying for a renovation loan, it’s important to hire certified contractors or interior designers. Many people end up needing a loan because they were taken advantage of by a contractor or designer who left the project halfway through or added unexpected expenses. Look for CASETRUST-RCMA Joint Accreditation to ensure that you’re working with a reputable company that has a performance bond to protect your deposit and has been vetted to avoid working with untrustworthy individuals.

Renovate important spaces first, like bedrooms, kitchen, and toilet. Then, later on, create a living room, study, junior suite, etc. Resist the temptation of instant gratification. The more patient you are, the less reliant you’ll be on renovation loans. Minimise customization

The bulk of renovation costs come from two things, materials and labor. More precisely, it’s materials and customization.

Labor costs can be low, but specialized skills come at a higher price. Customized features increase the cost and the likelihood of needing a renovation loan. Use pre-made products to avoid building from the ground up and reduce the need for a loan.

Ultimately, the best way to avoid renovation loans is to be a patient homeowner. Remember, you don’t have to sacrifice the upgrades you want to your home – you just don’t have to buy them all at once.

Which is better: A Renovation Loan or A Personal Loan

Very oftenRenovation loans are compared to Personal loans but there are some advantages to taking out the former if you need a loan specifically for home renovations.

Because they are meant specifically for renovations, the interest on renovation loans is lower than personal loans – since the bank knows that you at least own a home (an asset), and the money is being put to enhance the value of this asset.

The misconception about renovation loans is the perceived high interest rate as the published interest rate is higher than personal loans. However, the effective interest rate for renovation loans is lower than for personal loans due to the difference in interest rate calculation. The interest rates for home renovation loans can range from 3-4%, while a personal loan can be around 6-9% p.a.

Renovation loan is usually quoted in monthly rest rate which means that interest is calculated based on the outstanding balance of the loan. In contrast, a personal loan is quoted at a flat rate and the interest payments are calculated based on the original loan amount.

Let’s compare the two loans. Assuming a $30,000 loan amount and interest rate of 3.88% for a 5-year loan tenure, a renovation loan with a monthly rest rate will incur a total interest payment of $3,052 while apersonal loan with a flat rate will incur a total interest payment of $5,820. This represents an interest saving of $2,768 when taking the renovation loan.

Know more about Refinancing. Click Here.

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