Taking a Renovation Loan in Singapore: Pros, Cons and Alternatives

Finance your renovation the smart way.

The average BTO renovation costs between $51,000 to $62,000, which you can’t use your CPF to fund. Additionally, most interior designers and contractors do not accept credit card payments that effectively allow you to pay by installments.

So, unless you’ve got a wad of cash lying around somewhere, taking a loan is something you’d want to at least consider. That said, different loans have different eligibility criteria, interest rates and repayment periods.

Read on to find out which is the best loan to take for your renovation, based on your needs and situation.

How does a renovation loan work?

As its name suggests, a renovation loan is a specific type of loan issued by a bank or financial institution for the purposes of home renovations or repairs.

Typically,

• Applicants must be Singapore Citizens or Permanent Residents
• Minimum income and credit score requirements apply
• Tenures range from 1 to 5 years
• Requirements differ for HDB and private properties

If successful, payments are then made directly to the billing party (e.g. interior designer, contractor, supplier), and funds cannot be used for purposes besides renovations or repairs.

Pros and cons of renovation loans in Singapore

Historically, the main benefit in taking a renovation loan VS a personal loan has been that of typically lower interest rates.

On the flip side, renovation loans come with the following limitations:

• Capped at $30,000 or 6 months of your monthly salary, whichever is lower
• Requires submission of quotations from interior designers/contractors
• Cannot be used for aircon units, appliances, loose furniture and soft furnishings (which will generally set you back by $10,000 to $30,000)

Renovation loans in Singapore

• DBS Renovation Loan (5.88% p.a., EIR 6.95% p.a.)*
• Maybank Renovation Loan (4.08% p.a., exclusive to Maybank Home Loan customers only)*

*As at time of writing on 26 February 2025; EIR = effective interest rate

Other ways to fund your home makeover, besides a renovation loan

However, as at time of writing, several major banks in Singapore that used to offer renovation-specific loans no longer do so.

Instead, these banks now encourage homeowners to finance their renovation with alternative types of loans like personal loans or balance transfers.

For one, interest rates for personal loans have become increasingly competitive in recent times. Meanwhile, a balance transfer is a short term loan with zero to low interest (important note: assuming you’re able to repay the loan on time), where you’re only required to pay a one-time administrative fee.

Personal loans and balance transfers for renovation in Singapore

• Standard Chartered CashOne Personal Loan (2.88% p.a., EIR from 5.43% p.a.)*
• UOB Personal Loan (2.88% p.a., EIR from 5.43% p.a.)*
• UOB Balance Transfer (0% interest)*
• CIMB Personal Loan (From 2.80% p.a., EIR from 5.28% p.a.)*
• HSBC Personal Loan (2.92% p.a., EIR 5.50% p.a.)*
• Trust Bank Instant Loan (From 2.49% p.a., EIR 4.72% p.a.)*

*As at time of writing on 26 February 2025

So, what’s the best loan to take for your renovation?

If you’re wondering what’s the best type of loan to take for your renovation, well, there isn’t a straightforward one-size-fits-all answer.

Instead, you’ll need to evaluate your situation based on the following factors:

Factors to consider (with example scenarios)

Loan amount

If you’re planning on borrowing more than $30,000 in a single loan, a renovation loan wouldn’t be an option given the cap of $30,000.

This then begs the question: how much would you need? Check out the following resources to get a ballpark:

• How Much is a 3,4, and 5-Room HDB Flat Renovation in 2025?
• Singapore Condo Renovation Costs (New and Resale) in 2025
• Rough Renovation Costs by Room: Living Area, Kitchen, Bedroom, and WC

If you already have an idea of features you’d want and the renovation works required, you may also use our renovation calculator for a more accurate estimate.

Eligibility/restrictions/approval process

As aforementioned, renovation loans cannot be used on appliances, loose furniture or even smart home setups. A personal loan or balance transfer, on the other hand, can.

Since you won’t require the submission of quotations, the approval process for personal loans and balance transfers also tends to be much faster. In turn, this allows you to leverage time-sensitive deals, particularly on big-ticket items (e.g. a sofa or fridge).

Tenure and repayment structure

That doesn’t mean renovation loans aren’t worth considering though. They may have longer repayment periods and/or lower interest rates compared to personal loans, which may be more comfortable for you.

On the flipside, if you’re confident of repaying your loan on time (e.g. you concurrently need the cash for your wedding and are certain the bulk of its cost will be offset by angbaos), 0% interest for balance transfers will definitely be a strong pull factor.

Conclusion

In summary, loans provide a buffer to help you achieve your dream home even if you don’t have the cash required at the moment – but it’s important to live within your means and factor in how you’re going to repay the loan.

Do also speak to at least 3 to 5 interior designers so you can compare quotes before signing with one that can work within your budget. If you’re not sure where to begin, let us know your budget and preferences via the button below, and we’ll recommend interior design firms accordingly!