You are a new home owner or you are looking to upgrade the home that you have been living in for the past 10 or 20 years. What financing options do you have? Unless you have carefully set aside savings for your home renovation plans, you could probably use some financial help from a home renovation loan, which can also come in the form of a personal loan.
With so many personal loans out here, how do I know which one to choose?
There are over 20 banks in Malaysia that can offer you a personal loan, each with their own interest rates and conditions. The trick here is finding the best offer for you based on the amount of money that you need to borrow from the bank.
Step 1: Identify the renovation needs of your home and your budget
For starters, it’s probably a good idea to get an idea of the renovations you intend on doing to your home.
Will you be working on one section of your house such as your kitchen? Or will you be doing major renovations that require you to knock down walls and create an entirely new floorplan?
You will also need to assess how much you’re willing to spend. Do you have any savings? Or will you rely solely on the added cash flow from a personal loan?
Step 2: Compare personal loan products
With a budget in mind, it’s easier to work backwards. If you needed the extra funds that a personal loan can provide you, we suggest using free comparison tools to find the best loan for you.
Key in your minimum income, the tenure of which you intend to repay the loan and let the site do the hard work for you.
In a matter of seconds, you’ll have various personal loan options to pick from. Apply and await approval.
A personal loan is a great solution because it is an unsecured loan (that means you don’t require to offer assets or collateral to a bank) and you receive funds to help you cover costs that other loans don’t cover.
The total loan amount, known as the principal, is then repaid to the bank over a tenure of six months up to 10 years.
At a bare minimum, you will have to be at least 21 years old (but not over 60 years old) and you can borrow as little as RM1,000 up to RM400,000. This depends on your minimum income and your credit rating as well as the bank’s approval of your application.
Step 3: Enlist the expertise of contractors or interior designers
Once you have a rough idea of the renovations you’ll like to make, we recommend enlisting the services of contractors or interior designers to help you bring your idea to life.
Before going with the first one you find, we suggest doing a comparison of the various quotations you received and going with the one that fits with your budget.
You could also opt for a home renovation loan
A renovation loan differs from a personal loan in that, it is a loan specifically for home renovation or refurbishment needs.
Here are the few options available to you in Malaysia: OCBC Renovation and Refurbishment (RNR) loan; the Maybank MaxiHome loan; the Public Bank 5 HOME Plan; the Alliance Bank Home Complete loan; the various CIMB Home loans.
However, most of these home renovation loans come bundled into the overall mortgage loan as an additional facility.
If you’re applying for a mortgage loan and would like to have that option of additional funds for home renovations at a later date, consider opting for one that has the home renovation facility.
Renovate your home within your budget
If you’re looking at doing minor fixes to spruce up your home, there are budget-friendly options that you can consider including simple hacks like reupholstering your sofa, painting your walls, and little tricks to upgrade your kitchen. Read our article here for more budget friendly tips.
For more tips on home financing options, budget-friendly upgrades and various personal loan tips, head over to the CompareHero.my blog and stay tuned!
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