There is a few things in life are as daunting as decorating your first home. It’s really hard not to feel overwhelmed as there is so many options available in the market and so many decisions to make. Ok, let say you already have an awesome ideas on how to decorate your lovely new home, but the first thing that always comes into mind is “I have spent 90% of my savings on house purchase, now I’m out of budget to decorate my new home that I like”. Well, that is really disappointed.
But, wait a minute!!! Did you know there is a type of loan that actually available for those who are facing house decoration problems like you to apply? Yes, that is Renovation loan! Whether you are starting out or starting over, this is a great choice to help yourself to navigate the difficult process of decorating a home for the first time.
Continue read on to get more details about renovation loan;
Renovation loan is a kind of personal loan that specifically designed for those homeowners who facing difficulty on house decorating. Renovation loan is usually bundled with a home loan and is sold as a package. The bank may offer a better interest rate for home loans when the renovation loan is taken as part of the package. Applicants are need to provide the related documents to proof of renovation while the collateral is not needed for renovation loans.
The loan documentation for renovation loans are relatively simple. Normally, it’s entry costs are cheap and funds are released very quick.
Its like other personal loans, most of the renovation loans are calculated by using flat interest rate. But, do take note that Alliance Bank’s Home Complete Renovation loan where the interest is calculated by using the reducing balance method.
Here is an example of how a renovation loan work:
Let say Janice has bought a subsale property with a RM 600k loan from Bank A.
Loan Amount: RM 600,000
Loan Tenure: 30 years
Interest rate: 4.6%
Monthly repayment: RM 3,706
After assessing Janice credibility, Bank A decides to offer the loan a sum of RM 150K to Janice
Loan Tenure: 10 years
Interest rate: 7.6% (Flat rate)
Monthly repayment: RM 2,200
And thus, Janice will need to prepare a RM 5,276 (RM 3,076 +RM 2,200) for monthly repayment. Which means she have to service 2 loans in total.
Now you have not to worry about no money to decorate your house. Do consult the bank for more details.