There are several factors to consider when choosing your renovation loans. Some of these factors are:
1. Loan Amount
The first thing you need to do is find out which parts of your home need a renovation and how much is your budget. As we’ve mentioned before, HDB flat owners tend to spend around $30,000 to $60,000 for their renovations on average, so the amount you need to borrow would need to cover all your essentials.
In addition, renovation loans in Singapore are limited by the amount you are able to loan and if your plans have exceeded the amount you have budgeted for or are able to take out, you will have to pay the remaining amount out of your pocket. So plan ahead to keep your budget manageable.
2. Interest Rate
Your loan amount is not the only thing you should consider when looking for the best deals. The maximum loan amount with the interest rate and fees total should be considered as you would not only be paying for the amount you have taken out, you will also be paying for the interest rate and amount accrued.
Therefore, you need to know how much interest you will be charged in total, and if the rates are done monthly or yearly. This would allow you to know how much you will be paying in total instead of just the amount you have borrowed.
Some unscrupulous lenders have also added fees that are not spoken of until the signing of the contract is over. Others have made their loan officers gloss over their fee rates, downplaying the amount you would be paying beforehand.
It is in your best interest to seek clarification on all the fees associated with the contract and find a lender that offers you the lowest possible rates, as the rates would determine your total amount to be paid at the end of the day.
4. Loan Providers
Your loan provider could perhaps be the most important factor for your consideration. A decent loan provider would be able to give you great interest rates, flexible repayment terms and low fees for your loans.
A badly chosen loan provider would instead cost you more as the lender would be tacking on hidden fees, charges and other rates not mentioned prior to the signing of your loan contract.
You should only choose a moneylender that is licensed, and registered with the Registry of Moneylenders. If a lender is offering you rates and terms that look too good to be true, it probably is. Do your due diligence, research your loan provider carefully and find out if they are legit or loan sharks masquerading as legal lenders.
If you are unsure, check out some of our best licensed moneylenders around Singapore. These lenders are proven by many others to be reliable, trustworthy, and most importantly, licensed.