House Renovation Loan: Everything You Need to Know

 

Renovating your house can be something that is necessary or it can be something that is not urgent, but you want it for your pleasure or to increase the quality of life inside your house. A house renovation loan can be an ideal solution, especially if you don’t have a separate budget for the repairs that needs to be done. If you want to improve your kitchen, your bathroom or your entire house, without having to spend all the money from your pocket at once, a renovation loan in Singapore can be the ideal solution. 

House Renovation Loan: Definition

According to Business Insider, a house renovation loan is “a term referring to a loan that pays for upgrades or repairs to a home”. With this type of loan, homeowners have access to money to upgrade, improve or repair their house. There are different types of home repairing loans, each of them with different rules and, of course, requirements.

First of all, you can choose between a secured loan and an unsecured loan. A secured loan refers to the renovation loan where your house is considered a collateral, meaning that in case you don’t pay back the loan, the lender has the possibility to sell your house and you could lose it. The other type of loan is considered a personal loan and you don’t have to secure it with any guarantees or collaterals.

The difference between these two types of loans is that the interest rate is usually higher for unsecured loans than the one established for the secured loans. There are also other types of loans, some related to house improvements and other general loans, such as home equity loans or line of credit, refinancing loans, credit cards or personal loans. You can check the benefits and conditions, along with requirements and see which one suits you the best.

Ways You Can Use a House Renovation Loan in Singapore

Many people in Singapore choose to get a house renovation loan because it offers you many advantages. Instead of having to pay a large sum of money to do all the changes, improvements or repairs that you need to do, you can opt for this loan. This means that you will have to pay a single rate per month, which allows you to budget your expenses, without any worries that all your money will be spent for the repairs.

Painting and Flooring

If you want to repaint your house or change the floors, this type of loan comes in hand, because it allows you to make the changes that you want or need.

Electrical and Plumbing Work

Your house might need to have the electrical system installed or changed. The same could apply for the plumbing work and in both cases, a renovation loan would be helpful.

Furniture

If you suddenly decide that your old furniture is not good enough, and you need to buy a new furniture that is more practical, with the help of a home repairing or improvement loan, you can definitely change your furniture.

Bathroom or Kitchen Improvements

Many lenders give out loans for bathroom and kitchen improvements. You can make a smart investment with this loan and improve your bathroom and your kitchen with anything that you want.

Any Other Repairs

There are always some other repairs that need to be done, such as repairing the roof in case of flooding or other accidents; building a fence or an inside wall. You can make all the repairs that you need.

Benefits of Getting a Repairing Loan in Singapore

There are many benefits of getting this type of loan, if you decide that you don’t want to postpone all the repairs or improvements you want to make to your house.

You Avoid Spending All Your Savings at Once

In the best case scenario, your renovations can cost your hundreds of dollars, but in most cases, renovations can cost thousands of dollars. First of all, you can make an approximate calculation, but at the same time, you don’t know if the sum you estimated will be the same with the total, because in most cases, you discover that the repair problem is more complex than you thought and you need to resolve other problems as well.

Getting such a loan allows you to leave your savings aside for other important needs and use the loan instead. You pay for all the repairs and improvements with the loan and you keep your money aside. You only have to pay back small amounts of money, usually monthly and in this way, you don’t have to worry about spending all your money and savings.

You Can Have Lower Interest Rates

Usually, renovation loans have a different interest rate compared to other types of loans, such as personal loans or other credits. This means that you will get a lower interest rate, which makes this loans more affordable and more practical.

Having a lower interest rate allows you to pay the loan without any difficulties. At the same time, compared to other types of loan, you will get a longer period of time to repay the loan. Usually, the period of time is set to be between one to five years, while some lenders offer the possibility to extend the period to seven years.

This Loan Is Adapted for Any House Matters

Whether you need this loan for urgent repairs that need to be resolved fast or you want the loan to make all the improvements that you want, this loan can help you and it doesn’t take too much time for the application to be approved. So, if you want to repair your roof, your plumbing systems or simply to buy new furniture or change you bathroom or improve your kitchen, this loan can be your solution.

Conclusion

If a house renovation loan is something that interests you, you can definitely apply for this loan and use the money you get to resolve all the issues that need to be resolved. However, make sure that you don’t borrow more than you need and that you respect your payment schedule, taking care of paying back the loan on time.