{"id":15315,"date":"2018-05-26T21:14:16","date_gmt":"2018-05-26T13:14:16","guid":{"rendered":"https:\/\/www.99.co\/blog\/singapore\/?p=15315"},"modified":"2022-07-01T04:52:49","modified_gmt":"2022-06-30T20:52:49","slug":"home-renovation-loan","status":"publish","type":"post","link":"https:\/\/www.99.co\/singapore\/insider\/home-renovation-loan\/","title":{"rendered":"How to do up your home without taking a renovation loan"},"content":{"rendered":"
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Having a home to call your own means you want to establish a sense of stability in your life. In this frame of mind, the thought of shouldering a $30k renovation loan — right after taking out a 25-year mortgage — will make your palms sweat. Well, don\u2019t have a panic attack yet; we spoke to some new homeowners and contractors on how to do up your first home without<\/em> needing a massive loan. Let’s begin:<\/span><\/p>\n

Renovation loans are getting crazy<\/b><\/h3>\n

In August 2017, the Consumers Association of Singapore (CASE) raised an alarm about <\/span>the increasingly crazy cost<\/span><\/a> of renovation packages. In the seven months from January to July that year, consumers collectively spent around $8.42 million on such packages. This figure translates to $11,711 for per renovation package, on average, when the 2008 figure was only $5,742.<\/span><\/p>\n

Doing up a house from scratch, especially when you’ve just collected your keys from the developer or HDB, can cost much more. Fully renovating a four-room BTO flat can cost upwards of $50,000 plus appliances. Most people finance these huge renovation packages with a renovation loan, or reno loan in short. <\/span><\/p>\n

A reno loan differs from a personal loan; the interest rate is a tad lower — somewhere in the range of 4 to 6% per annum. However, renovation loans are capped at $30,000, or six months of your income (whichever is lower). 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. <\/span><\/p>\n

The point is: taking a reno loan is a lot of money, and the interest rate isn\u2019t exactly low. So how do you avoid using more credit (on top of your home loan) and <\/span>still <\/span><\/i>have a homely apartment that doesn\u2019t resemble a World War II bunker? <\/span><\/p>\n

How to avoid needing a renovation loan<\/b><\/h3>\n

Let\u2019s get the obvious out of the way: if you save up enough money, you don\u2019t need to use a reno loan. But that\u2019s as useful as saying you can eat less to lose weight, or practice more to join the Olympics. <\/span><\/p>\n

Putting aside the obvious, here are practical steps to make your renovation affordable without<\/em> loans:<\/span><\/p>\n