Home Renovations: Which Type of Loan Is Best For Your Needs?

Table of Contents

Young woman discussing home renovation plans with contractor in Singapore

Let’s face it; moving into a new home is an exciting venture. This doesn’t just allude to a new chapter in life, but it’s also a big financial undertaking. On top of figuring out how best to settle your mortgage, there’s also another issue you’ll need to resolve: house renovations.

It’s no understatement that renovations can make or break your new dream home. And often, knowing that there’s still renovation fees to take care of before being able to move in can dampen the whole experience. To alleviate that common problem, personal loan moneylenders offer a couple of suitable financial solutions: personal loans and renovation loans.

To know which of the two loans is the best for your renovation situation, read on to learn the differences between a personal and renovation loan.

Finding the right loan for your home renovation

Regardless of the type of loan, the size of personal and renovation loans is highly dependent on two things: your mortgage and your annual income.

On average, Singaporeans are known to spend about S$50,000 to S$60,000 for a HDB renovation and up to 20% of their home value. Bear in mind, this cost does not include furniture cost. Renovation loans can bear the brunt of this cost, as you can typically acquire a loan amount of up to S$30,000.

As the name suggests, a renovation loan is a loan facility availed solely to renovate one’s home. If you’re taking out a bank loan, you can expect certain restrictions on how you can use the renovation loan. Moreover, the money would go straight to your interior designer or contractor directly. Banks can also apply an additional surcharge if your loan has to be disbursed in stages or to different vendors. Do note that these renovation loans don’t cover furniture expenses either!

On the other hand, if you wish to have more leeway, then perhaps a personal loan would be better. Apart from being able to use for the loan whenever and however you want, personal loans also entail less paperwork. You don’t need to present any renovation contract or quotations to apply for the loan. More often than not, personal loans are much bigger in size, and they could go as high as S$250,000.

Interest rates

Despite the higher loan ceiling, personal loans are typically at 4% p.a, which is higher than the interest rate for renovation loans. The latter typically starts below 3%.

Another aspect is how the interest for these two loans are calculated, in which the renovation loan wins in terms of savings. The reason being is that the renovation loan’s interest is calculated based on the outstanding loan balance, meaning it is reduced as you keep paying it off. This is a stark contrast to the personal loan, whose interest remains static throughout the entire term.

Loan eligibility

When it comes to the eligibility of these loans, they both share a couple of similarities. These similarities are, namely: be of legal age (21 or above) and possess a Singaporean citizenship status. And while anyone can apply for a regular personal loan, the same can’t be said for renovation loans. To qualify for a renovation loan in Singapore, an essential requirement is that the applicant must be the property owner to be renovated and show proof of such.


Renovations no doubt cost a hefty sum, but with the presence of readily-available personal and renovation loans, you don’t need to drain your finances all in one go.

If ever you’d prefer a more flexible renovation loan agreement, we have it! We are a licensed moneylender in Toa Payoh that take pride in providing financial assistance to those who are desperate in need of help. Our flexible renovation loan includes not only a higher loan cap than most (S$50,000), you are also free to spend your loan on furniture and renovation fees however you see fit – this includes exploring hiring different vendors and contractors for different renovation procedures.

Whether it’s just for renovations or something more, Goldstar Credit offers loans for all your requirements. We are a credible and licensed moneylender that tailors relevant solutions for all your financial needs, so give us a call today and let us help you.


While we try to provide the most accurate information on this website, it may not reflect the most current developments. The information on this website may be changed without notice and is not guaranteed to be complete, correct, or up-to-date. All information provided is for informational purposes only and shall not be relied upon as professional advice. We shall not be liable for any loss or damage resulting from the use of this website

Apply now!

We charge competitive interest rates and fees, which is why so many of our customers keep returning to us.

As a Goldstar customer, you get to enjoy:
Loan interest rates of 1-4% a month*
A maximum of 5-10% in processing fees*