By MoneyBees
See how much you can borrow for renovation under MAS rules, the lower of 6 months' income or S$30,000 for up to 5 years, with the instalment, interest, EIR and cash gap.
Up to 6 months of your income or S$30,000, whichever is lower, under MAS Notice 635. Renovation loans you still owe the same bank count toward that. On S$4,000 a month you can borrow up to S$24,000.
5 years. MAS Notice 635 requires renovation loans to be repaid within 5 years.
Yes. A joint loan can be with your spouse, child, parent, sibling, fiance or fiancee. The loan is split equally between you and each share is checked against that person's own limit, so two borrowers can borrow up to S$60,000 between them.
Not if it meets the MAS terms. A renovation loan within the cap and the 5-year period is treated apart from the limits on unsecured borrowing that cover personal loans and credit cards.
A flat rate charges interest on the full loan for the whole period, even as you repay it. The EIR measures interest on what you still owe. S$30,000 at 4% flat over 5 years works out to an EIR of about 7.68%.
The bank must check that the money goes to renovation work, and the rule speaks only of renovation costs. Ask your bank what its loan covers before you sign.
You pay the rest in cash. On a S$45,000 quote with a S$24,000 loan, you need S$21,000 of your own money.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).