Unsure which HDB renovation loan you should take? Everything you need to know is here, from considerations to available loan options. Learn more.
Giving your home a new look can cost a significant amount, and most of the time, homeowners take renovation loans as their primary financing plan.
If you read our HDB renovation step-by-step guide, you know that having the budget plan secured is key before you start considering the details of your dream home.
So, we're here to help you go through what you need to know before signing up for a loan and explore all the choices you have out there in the market.
What to Consider Before Taking a HDB Renovation Loan
Taking up loans is a major undertaking, so it's wise to consider a few things carefully before making up your mind on one.
Understand Your Financial Capacity
The most obvious one is to assess your financial capacity. Meeting repayments can be a major headache if it gets in the way of your other financial commitments, so it's best for you to gauge whether a loan will cause a strain on your overall budget.
To begin, calculate your debt-to-income ratio by taking the total of your current monthly debts and dividing it by your gross monthly income.
This will provide a clear picture of how much income is already allocated to debts, helping you assess whether an HDB renovation would be a burden or not for you.
Let’s say your monthly debts amounted to $2,000/month, and your gross monthly income is $5,000.
In this example, the debt-to-income ratio is 40%. This means that 40% of the individual's gross monthly income is currently allocated to debts. It's generally recommended to keep this ratio below 43% for financial stability. This calculation can help individuals assess their financial situation before deciding on an HDB renovation.
HDB Renovations Terms and Conditions
Also, take note of the terms and conditions lined by HDB renovation loans in Singapore. You must thoroughly understand the loan you're considering before you even arrive at the process of agreeing to it — this helps prevent unwanted surprises when it's time to pay them back.
When going through the loan agreement, pay attention to these key elements:
- Interest rates
- Repayment tenures
- Processing fees
- Additional hidden charges
Make sure all your doubts are clarified to the tee by your assigned financial advisor.
Compare Loan Criteria & Offers
Different banks offer varying interest rates and HDB renovation loan fees. It's best to keep your options open. Compare these rates to get the most cost-effective one that suits your financial standing.
There is a wide range of online tools available to help you with this, such as:
- DBS Renovation Loan Calculator
- Maybank Renovation Loan Calculator
- QuickLoan Personal Loan Calculator
Alternatively, consult a financial advisor to find the best solution for you before moving forward.
Are You Eligible for a HDB Renovation Loan?
In general, these are the main criteria for you to be eligible for most HDB renovation loans:
- Own a property
- Be a Singapore Citizen or PR
- Have a good credit score
- Fulfil the minimum income requirement stipulated by the bank
Available Options to Explore
To help you make an informed decision, here's a comparison of HDB renovation loan rates from different banks.
| Provider | Loan Amount | Interest Rate (p.a.;%) | Monthly Instalment | Total Payable Interest | Processing Fees | Eligibility Criteria |
| Maybank | $30,000 with a tenure of 3 years | 6.53% | $919.88 | $3,115,68 | 1.25% of the loan amount or a minimum of $150, whichever is higher | Singapore Citizen or PR, aged between 21 to 55 years old, salaried or self-employed with a minimum annual income of $30,000 |
| OCBC | $30,000 with a tenure of 3 years | 4.98% | $898.86 | $2,358.96 | 0% (but there is a 0.50% admin fee on the loan amount charged) | Singapore Citizen or PR, aged between 21 to 55 years old, salaried or self-employed with a minimum annual income of $30,000 |
| CIMB | $30,000 with a tenure of 3 years | 4.15% | $887.72 | $1,957.92 | 1.2% of the approved loan amount | Singapore Citizen or PR, aged between 21 to 55 years old, salaried or self-employed with a minimum annual income of $24,000 |
| Standard Chartered | $30,000 with a tenure of 3 years | 3.48% | $920.33 | $3,132,00 | None | Singapore Citizen or PR, aged between 21 to 65 years old, salaried, variable/commission-based employees, or self-employed with a minimum annual income of $20,000 |
| DBS | $30,000 with a tenure of 3 years | 4.88% | $897.51 | $2,310.36 | 1% of the approved loan amount | Singapore Citizen or PR, aged between 21 to 65 years old, salaried or self-employed with a minimum annual income of $24,000 |
Maybank HDB Renovation Loan
- Has a competitive interest rate of 6.53%
- Offer borrowers an affordable option for their HDB renovation needs
- Accessible for a diverse age group and income
OCBC HDB Renovation Loan
- Has a 0% processing fee
- Competitive interest rate of 4.98%
- A cost-effective financing option with minimal additional charges
CIMB HDB Renovation Loan
- Has a relatively low-interest rate of 4.15%
- Processed fee is 1.2% of the approved loan amount
- Minimises both interest costs and upfront fees.
Standard Chartered HDB Renovation Loan
- Has an exceptionally low-interest rate: 3.48%
- One of the most affordable options in the market.
- No processing fees
- Suitable for borrowers seeking a low-cost loan option
DBS HDB Renovation Loan
- Competitive interest rate: 4.88%
- Processing fee of 1% of the approved loan amount.
- Suitable for a wide range of demographic; appeals to younger and older applicants.
DBS Eco-Aware Renovation Loan
- Competitive interest rate: 4.68%
- Processing fee of 1% of the approved loan amount.
- Must fulfil 6 out of 10 eco-aware renovation checklist
Choosing The Right HDB Renovation Loan For You
Getting a financing plan for your HDB renovation in Singapore is the most important step before you begin the journey of giving your home an upgrade. And nobody can give you a straightforward answer as to which is the best for you but yourself.
By understanding your financial position and grasping the details of all the options available to you, you will be able to make a sound choice. Even better, it’s one way for you to find out whether you’re able to begin your home renovation journey or if it’s a dream that you have to put on hold at the moment.
We believe that a steady pace is much better than a reckless one. So even if you’re on this road one small step at a time, it's progress nonetheless towards achieving your dream abode.
