Part 2 – Now that Your Renovation Loan is Approved
If you have not read the previous post, here is a brief recap: The Monetary Authority of Singapore’s notice for unsecured securities says that the maximum renovation loan amount is six times the monthly salary of the borrower or $30,000 – whichever is lower. The standard renovation loan tenure is one to five years. You can apply for a renovation loan if you are 21 to 55 years old, have an annual income of S$36,000 and above. For joint application, the main borrower must have an annual income of S$24,000 and above. You must either be a Singaporean or Singapore Permanent Resident. To apply for the renovation loan, you also need to produce your NRIC, your pay slips from the last six months if you are employed, CPF contribution history for the last 6 months (12 months for the self employed), and latest income tax statement (2 years for the employed and commission based earners).
Renovation loan approvals are usually communicated via email and supplemented with a phone call. Once the renovation loan is approved and the amount is in your hands, you may then proceed with your home renovation. The payment to your renovation contractor would depend upon the agreed upon payment terms – some require full upfront payment, some require payment in specific intervals. Your renovation loan can then be put to good use.
If eventually you found out that the renovation loan is not enough to cover the furnishings and other necessary fixtures, you can apply for another kind of loan – furnishing loan. Some banks in Singapore provide this. Just set an appointment with their representatives for a consultation. Furnishing loans usually cover the purchase of furniture and other home essentials. By the way, just to make it clear, you can apply for both renovation loan and furnishing loan, you can even apply for both loans twice.