RHB Renovation Loan Review: Should You Apply?
RHB Renovation Loan Review: Should You Apply?
ValueChampion Rating 
Pros
- Good alternative renovation loan when denied by other lenders
Cons
- Not the cheapest renovation loan available
RHB's charges higher interest rates for its renovation loans than other banks, making it more expensive than other available options in Singapore. This means it is not the best option for homeowners seeking financing to renovate their home; however it could be a decent fallback option for individuals that are unable to obtain funding elsewhere.
| Summary of RHB's Renovation Loans |
|---|
| High rest rate: 5.8% |
| High flat rates: 2.98% - 3.68% |
| Low processing fee: 1% |
| High minimum loan requirement: S$10,000 |
Table of Contents
What Makes RHB's Renovation Loans Stand Out to Borrowers
RHB offers renovation loans with either rest rate packages or flat rate packages. The rest rate charges 5.8% for loans of all tenures and amounts, which is not competitive with the other renovation loans in Singapore that offer lower interest rates. Additionally, while other banks offer preferential rates to their home loan customers, RHB does not.
RHB is unique in that it offers a furnishing loan, because renovation loans do not typically cover furniture purchases. However, the rates associated with the furnishing loan (9.14% - 10.59%) are more expensive than several personal loans available to borrowers in Singapore. Therefore, RHB's renovation loan products should not be homeowners' first choice and are better viewed as a backup option to other renovation loans.
Summary of RHB's Rest Rate Package Renovation Loan
| Maturity | Fees | Interest Rate (Rest Rate) | Monthly Instalment | Total Cost |
|---|---|---|---|---|
| 1 | 1% | 5.8% | S$1,290 | S$625 |
| 2 | S$663 | S$1,073 | ||
| 3 | S$455 | S$1,529 | ||
| 4 | S$351 | S$1,993 | ||
| 5 | S$289 | S$2,466 | ||
| *Assuming loan of S$15,000, total cost includes impact of promotions and fees | ||||
RHB's flat rate package charges 3.68% for loans below S$15,000 and 2.98% for loans of S$15,000 - S$30,000. These rates are also less competitive compared to the best renovation loan rates available in Singapore. However, its 1-year flat rate loans of at least S$15,000 are RHB's least expensive and could be a decent backup option to CIMB which offers the cheapest short-term renovation loans.
Summary of RHB's Flat Rate Package Renovation Loan
| Maturity | Fees | Interest Rate (Flat Rate) | Monthly Instalment | Total Cost |
|---|---|---|---|---|
| 1 | 1% | 2.98% | S$1,287 | S$447 |
| 2 | S$662 | S$894 | ||
| 3 | S$454 | S$1,341 | ||
| 4 | S$350 | S$1,788 | ||
| 5 | S$287 | S$2,235 | ||
| *Assuming loan of S$15,000, total cost includes impact of promotions and fees | ||||
Who Can Apply: Eligibility Criteria
- Maximum Principal
- 6x Monthly Income or S$30,000
- Rest Rate
- 5.80%
- Cashier Fee
- Free 1st, S$10 fee after, max 3
To be eligible for RHB's renovation loans, homeowners must be between 21 and 55 years old and earn an annual income of at least S$24,000. RHB offers renovation loans of S$10,000 to S$30,000 or 6 times the applicant's monthly income, whichever is lower.
Other Charges and Fees
RHB charges a 1% processing fee, which is lower than other renovation lenders. It also charges a range of standard fees including disbursement, late payment, cancellation, full repayment and partial prepayment fees. We recommend that borrowers carefully plan their repayment and stick to their plan in order to avoid paying these fees and driving up the cost of their loan.
| Fee | Amount |
|---|---|
| Processing Fee | 1% |
| Administrative Fee | NA |
| Cashier Order | S$10, first is free |
| Partial Prepayment Fee | 2% on the prepaid amount |
| Cancellation Fee | 1% on the undrawn loan amount cancelled, S$200 maximum |
| Full Redemption Fee | 2% on outstanding loan amount |
| Late Payment Fee | 5% above Prime Lending Rate on overdue instalment |
How to Apply: Application Process
To apply for RHB's renovation loans applicants must submit an application form as well as documents to prove homeownership and income. Salaried applicants can submit either their latest computerised payslip, CPF Contribution Statement for the past 12 months or latest Income Tax Notice of Assessment to prove their annual income. Variable income and commission-based employees can submit either their latest 6 months computerised payslips, CPF Contribution Statement for the past 12 months or latest Income Tax Notice of Assessment.
Other Required Documents:
- NRIC photocopy (front & back)
- Contractor's quotation (signed by homeowner and contractor)
- HDB Letter of Approval
- Marriage Certificate (for joint applications)
- Birth Certificate (for joint applications)
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Stephen Lee is a Senior Research Analyst at ValueChampion, specializing in insurance. He holds a Bachelor of Arts degree in International Studies from the University of Washington, and his prior work experience include risk management and underwriting for professional liability and specialty insurance at Victor Insurance. Additionally, Stephen is a former US Peace Corps Volunteer in Myanmar (serving between 2018-2020), where he continues to provide business development consulting services to HR companies in Asia Pacific.