Renovation Loan Tips
The first thing that comes to people’s mind about renovation loan is low interest rate. That is really normal as it concern how much one will pay.
Maybank is one of the most competitive bank in the market that provides renovation loan
I just don’t understand how can our own local banks be charging at a higher rate than foreign banks. The banks whether local or foreign always display interest rate figures that are always misleading.
Therefore, the simplest way to know which renovation loan is the cheapest is to manually calculate how much in total you will be paying. Example: (monthly installment amount) x (total number of months) + administration fee
Take note of how your ID will be paid
There are 2 choices of payment to your ID:
- One-time full payment
- Pay based on stages of renovation
For one time full payment, which means paying your ID the full amount of the loan even before your renovation even started or completed.
This is a very disadvantage way to you as a home owner. Why?
- When the money is already in your ID’s hand, there is less bargaining chips in your hand.
- If there is something wrong with the renovation or the work is not done as promised, there is basically nothing much you can do.
- He can even tell you it cannot be done and you will be knocking your head against the wall! This will usually happens when the banker in-charge of the renovation loan is recommended by the ID.
Paying the cheques separately to the ID based on the stages of the renovation. Why?
- The ID will be kept on their toes and you have control over the renovation.
- If in any case there is a dispute and you want to change ID, your lost is minimum
Example, $50,000 loan into 3 different cheques, $10,000, $20,000, and $20,000. Set your renovation budget right too! Therefore, do check with the banker about the way the renovation loan is paid before you sign!
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