Introduction

You may have an idea of extending your home, but you might wonder how much it will cost and what options are available to finance your project.

Of course, one option is to use a home remodeling loan. If you’re looking for a cheaper way to do this project, consider the following:

You can borrow a much higher sum with a personal loan.

While both personal and home remodeling loans will allow you to borrow money to renovate your home, you will be able to borrow a much higher sum with a personal loan.

The main reason for this is how the interest rate is calculated.

A personal loan has a variable interest rate which means it can change from time to time.

In contrast, home remodeling loans have an interest rate that does not change during the life of the loan. 

As a result, they are more stable but less flexible for borrowers who want to adjust their borrowing according to changes in their financial situation or other circumstances (such as rising rates).

The maximum loan amount you can borrow

In Singapore, the maximum loan amount you can borrow under a Home Remodeling Loan is S$30,000, while the minimum is S$1,000.

In contrast, a personal loan provides up to 4X your monthly salary (or up to 8X for selected banks), subject to approval and availability.

Generally speaking, if you’re looking for more than S$30,000 for your home remodeling needs alone or just a portion of it (e.g., kitchen).

Then a personal loan would be more suitable for your situation as compared to taking out two separate loans, one for your home remodeling needs and another one for other purposes (e.g., holiday).

Interest rates

Additionally, when it comes to interest rates, banks typically offer home renovation loans in Singapore at an interest rate of between 1% and 3% per annum. Banks may also charge an additional handling fee that’s usually between 1-3%.

For a personal loan, the interest rate is typically lower than what you get with a home improvement loan offered by banks (1 – 6%).

Personal loan providers also do not charge additional fees or charges for processing your application and disbursing funds to you.

This makes them your best bet if you want to save on interest payments while financing your project comfortably at the same time.

But with Personal Loans from Bajaj Finserv, the Pocket Insurance & RFID Cardholder can enjoy loan amounts of up to S$100,000 at interest rates starting from 2.99%, along with processing fees as low as S$0 (T&C Apply).

If you’ve been considering renovating your home but have been put off by the high cost of renovations, personal loans could be an excellent option. 

Personal loans can help you to remodel your home with a flexible repayment schedule.

If you are planning to extend your home or undertake any other major home renovation project, such as adding a carport or building a new deck, then this article may interest you.

In this article, we will discuss how personal loans might be able to assist in funding these kinds of projects and why they may be preferable over other types of financing options like home improvement loans or remodeling loans offered by banks and credit unions.

You can decorate your house by availing of a personal loan instead of home remodeling or renovation loans.

If you plan to extend your home, why should you consider a personal loan instead of a home remodeling or renovation loan?

The answer is simple: personal loans are cheaper than home renovation loans, more flexible, and easier to qualify for. Personal loans can also be used for purposes other than house extensions.

Personal loans are cheaper than home renovation loans because they have lower interest rates and smaller fees. This means you will pay less in monthly payments over the long term.

With most banks offering personal loans at fixed rates from 2% p.a., there’s no need to worry about fluctuating interest rates or hidden costs associated with variable rate mortgages or line of credit products like HELOCs (home equity lines of credit).

Conclusion

In conclusion, if you’re planning to extend your home or fix it up, then a personal loan is a better option than a Home Remodeling Loan in Singapore.

Personal loans allow you to borrow larger sums at lower interest rates and without additional charges.