2 Types Of Bank Loans To Renovate Your Home
To most people, renovation is part and parcel of the whole home buying process. Whether you’re buying primary or sub-sale properties, chances are, you’re going to spend quite a bit to make the home, well, you. Unfortunately, home refurbishment is also expensive. Depending on your taste and preference, the process of turning your house into a dream home could easily go up to five figures, or more.
If you’re thinking about renovating but don’t have the cash to do so, here are two common ways you can secure financing from the banks for the purpose of refurbishing a property.
1) Personal loans
Personal loan is probably the first and most obvious choice if you need cash to renovate your home. In Malaysia, all major banks offer such loan facility, albeit with different terms and conditions; so getting one that fits your requirement may prove to be quite a challenge.
A good simple approach in using personal loan to finance your home renovation is to first decide on the amount you need, and then make the necessary comparison to find a bank that offers you the lowest interest rate for that specific amount. To find the best rate, refer to our reliable personal loan comparison table, so you don’t need to personally visit each and every bank.
For those who intend to apply, take note that starting July 5, 2013, Malaysian banks can no longer grant personal loans with repayment periods of more than 10 years, due to these new loan regulations imposed by Bank Negara Malaysia.
2) Renovation loans
A renovation loan is a loan product offered by banks for the specific purpose of refurbishing a property. In Malaysia, these loans do exist, though they are usually offered only to housing loan borrowers of the same bank or bundled together with the loan package.
Currently, these are some of the notable loan packages* you may wish to consider:
OCBC Bank: offers a Renovation & Refurbishment Loan that comes with no monthly maintenance fees, flexible repayment period of up to 10 years or 70 years old (whichever is earlier) and the option to start repaying instalments up to one year after loan disbursement. It is exclusive to OCBC Bank customers.
Alliance Bank: offers a Home Complete Personal Loan which is termed as “a personal loan bundled with mortgage financing” (i.e. to put it simply, this is not a standalone loan product but rather an additional facility of a home loan package). This loan offers up to RM150,000 for renovation or contingency purposes and has a maximum repayment period of 10 years.
Maybank: the MaxiHome-i home loan package offers additional financing for personal investment needs, any contingencies and home improvement.
*Based on information provided on websites of banks in Malaysia as at September 2013