Couple renovating their home with a renovation loan from a contractor

Can I Get A Renovation Loan From Contractors In Singapore?

Whether it be an HDB resale flat, a brand new BTO, or your dream condominium apartment, chances are you’ll want to tweak your new abode to your exact liking.

If you’re eager to renovate your home but find yourself a little short on funds, don’t fret. You can try supplementing your renovation budget with a renovation loan from contractors

Renovation loans in Singapore – what are your options?

There are many options for homeowners looking to pay for their renovations. Some of the more popular choices include renovation loan packages from DBS and other major banks. There are also various licensed moneylenders who offer loans that you can use to pay for your renovations.

Additionally, certain contractors in Singapore offer in-house loans to their clients or may be able to apply for a loan on your behalf. You may find this “one-stop” service model appealing, especially if you’d rather not have to deal with too many different parties for your renovation.

READ MORE: How to apply for a furniture loan in Singapore?

How do renovation loans from contractors work?

Contractors or ID firms that can help you get a loan for your home renovation will display the service on their websites. They may also have it on their enquiry forms as an option you can select.

Even if the contractor you are interested in hiring doesn’t seem to provide renovation loans, you should still let them know you’re looking for one. They may be able to assist you in finding a suitable loan or provide other recommendations for funding your home renovation.

In the vast majority of cases, your contractor is likely to be acting as a middleman in your loan application. This is because they probably do not have the finances nor the proper licences required to be a legal moneylender in Singapore.

Your contractor may handle your loan application and paperwork on your behalf, or simply put you in touch with an appropriate lender.

Pros and cons of getting renovation loans from contractors

Pros Cons
One-stop service, reduce the number of parties you have to deal with There may be middleman fees or commissions
May be able to enjoy lower interest rates or bulk discounts You may not have full clarity on the lender
Potential to customise loans to your needs

The main advantage of getting a renovation loan from a contractor or ID firm is convenience. You’ll only need to deal with one party during your renovation, instead of having to bounce between a bank or lender and your contractor.

You may also be able to enjoy lower interest rates on your loan, but this largely depends on the relationship between your contractor and the lender.

Another potential benefit is you may be able to negotiate with your contractor to customise your loan to your needs.

On the other hand, renovation loans from contractors may also have disadvantages. For example, you may be charged middleman or commission fees, which may be hidden from you. In some cases, you may also not have full knowledge of the lender you are borrowing from.

Things to note when considering a renovation loan from contractors

Check that the contractor is certified

Renovation work can be complex, and there are strict safety rules and restrictions regarding what modifications can be performed. As such, contractors and ID firms have to be licensed to operate in Singapore.

Beware of unlicensed contractors, who may recommend or offer loans from unauthorised lenders, exposing you to illegal activities or shady dealings.

HDB homeowners can use HDB’s e-service to check if a renovation contractor is licensed. For private properties, a renovation permit from the Building and Construction Authority is required.

Compare different loan offers

Resist the temptation to simply accept the first loan offer you get. Instead, ask for multiple loan offers so you can compare them.

Some loans may offer higher interest rates but longer loan terms. Others may not have a loan quantum that is large enough for your needs. Yet others may come with freebies and perks.

After all, you won’t know if the loan you’re offered is the best one for you until you have at least a few other options to choose from.

Conclusion: What to do if your contractor doesn’t offer renovation loans?

Let’s say you’re convinced that a particular contractor or interior designer is the ideal vendor for you, but they do not offer a renovation loan service. What then?

Well, you’ll be happy to know that there are other lenders – banks and licensed moneylenders – you can approach to get the renovation loan you need.

Note that renovation loans from banks are capped at S$30,000, and may have strict eligibility requirements along with different fees and charges.

On the other hand, licensed moneylenders may be able to offer renovation loans with less stringent criteria and higher loan limits, but in exchange, tend to charge higher interest.

At Elite Investment and Credit, we are committed to providing renovation loans that best fit your preferences and needs, to help you achieve the home of your dreams. Speak with our friendly staff today!


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