Guide To Furnishing Loans – How To Finance New Furniture For Your Home

Save on your next furniture purchase with these home furnishing loan deals.

When you're looking to furnish your new home or upgrade the furniture, you need to do so stylishly and affordably. Furnishing loans can help you finance new furniture without breaking the bank. In this guide, we'll explain what furnishing loans are and how you can apply for one.

There are a few different financing options that you can explore. From personal loans to credit cards, each option has its own set of pros and cons.

So, if you are wondering whether you can use a loan to buy furniture, stay with us. We’ll fill you in on the different loan options available so that you can make an informed decision on what's best for your needs.

How do furnishing loans work?

Furnishing loans are a unique type of personal loan that can be used to finance the purchase and delivery of home furniture. They have more lenient income requirements than other types of loans and don’t require collateral. The good thing about furnishing loans is that most banks offer competitive interest rates.

Furnishing loans are usually short-term, unsecured, or loans with instalment plans. Here is a brief description of each type of loan: 

• Short-term loans are best when you need to furnish your house urgently. They have a high-interest rate, and the borrowing criteria are more stringent.
• Unsecured furnishing loans do not require collateral when borrowing.
• Loans with instalment plans offer you low rates and a flexible repayment schedule.

Learn more about loans here:
Your Go-To Personal Loans Guide in Singapore (Updated in May 2022)
New Singapore Housing Loan Rules In 2022 – How Much Can You Borrow?
How To Do Up Your Home Without Taking A Renovation Loan

Factors that determine eligibility for a furnishing loan

When you're looking for a furniture loan, many factors determine eligibility. Here are some of the most important factors.

Total debt servicing ratio (TDSR)

Your total debt servicing ratio is the amount of your income that goes to debt repayment. According to the Monetary Authority of Singapore, it should not exceed 55% of your income.

Credit score

Before you go for the furnishing loan, consider your credit score and ensure it's healthy.

Income

The higher your income, the more you are likely to get from the lender. Some offer three to four times your monthly income, while others can give up to six times as much.

Tips to follow when getting a furnishing loan in Singapore

Here are some important things that you should know before signing up for a furniture financing plan.

Affordability

Think about what you want in your home and stay within those constraints. The best way is to have a space that encourages comfort, simplicity, or beauty. Make sure you opt for what you can afford without straining.

Buy quality

Spend your money wisely. If you have a tight budget, focus on purchasing quality furniture for your home, even if it is slightly more expensive. It will save you money in the long run.

Go for a financing deal that works for you

Make sure that any financial plan you choose will work for your budget and needs.

The best renovation loans in Singapore

There are many furnishing renovation loans available in Singapore, but how do you know which one is best for you? Here are a few things to consider when choosing a renovation loan:

Interest rate

Make sure you compare the different rates on offer.

Loan amount

How much money do you need to borrow for your renovation project? Make sure the loan you choose offers an amount that suits your needs.

Repayment period

Most renovation loans have a shorter repayment period than regular home loans, so be sure to factor this into your decision.

Keep these factors in mind when selecting your furnishing loan from the options available.

More on this topic:
Home Loans In Singapore (2022): Best Mortgage Rates To Consider
Best Personal Loans To Ease Your Cash Flow In Singapore (2022)
How Much Can You Borrow For Your Home Loan?

Home furnishing loans in Singapore

Many lenders are offering different rates and products, so it's important to compare your options before applying. Here are some of the best:

DBS Green Renovation Loan

The DBS Green Renovation Loan will make it easy for you to achieve a green home easily. You can give your home the sustainable makeover you have been dreaming about. However, do note that the DBS renovation loans can only be used for home features that are permanent in nature, such as built-in cabinets, and painting and wallpapering your walls. 

Here are the features of the loan:

• Enjoy interest rates that go as low as 3.88% p.a.
• When you sign up for solar panel installation, you can receive a S$1,000 rebate
• Loan amounts of up to S$30,000 or six times your monthly income (whichever is less) are available
• Your application will be processed in one hour

Fees and charges

• A 1% processing fee is levied on the approved loan amount
• 1% insurance premium fee that guarantees you receive your money back in full
• If you repay your loan early, you will only pay a 1% early repayment fee
• A S$35 late repayment fee

To be eligible for the Green Renovation Loan, you must be a Singaporean or permanent resident earning a minimum income of S$24,000 annually.

DBS Renovation Loan

The main features of the DBS renovation loan are as below:

• Attractive rates of 4.18% 
• Comprehensive insurance coverage
• A minimum loan amount of S$10,000 is required, with a maximum loan amount of S$30,000 or six times your salary (whichever is less)
• S$24,000 is the minimum monthly income requirement

Fees and charges

• Low processing fee of 1% and insurance fee of 1%
• Partial prepayment is allowed
• There is a 1% cancellation fee, or S$200
• Early repayment fees of 1% of the outstanding loan amount

OCBC Renovation Loan

To make your life easier, OCBC provides loans with a quick approval process and an on-the-spot secure digital platform. The renovation loan has the following features:

• Get a minimum loan of S$5,000. You may be eligible for a loan of up to six times your monthly income or S$30,000 (whichever is less).
• Enjoy up to five years of loan repayment
• Low annual interest rate of 4.18% (EIR 5.19%)
• Hassle-free application process
• For single and joint applications, you must earn S$24,000 per month

Fees and charges

• Low processing fee of 0.5%
• Early repayment fees of 2% of the outstanding loan amount
• Late repayment fees of S$80

CIMB Renovation i-Financing

CIMB offers a minimum of S$10,000 for a period of four to five years for renovation works in HDB flats, so again this is probably more suitable if you’re thinking of getting built-in carpentry.  Here are the main features of this loan:

• Interest starts at 4.20% (EIR 4.61% p.a.) for a loan tenure of more than one year
• Covers homes that are completed and under construction
• Get a minimum loan of S$10,000 and a maximum of S$ 30,000 or six times your salary (whichever is lower)
• For single or joint applicants, Singaporeans and permanent residents earning S$24,000 are eligible

Fees and charges

• Early repayment fees of 1% of the outstanding loan amount
• Late repayment fees of S$80
• Cancellation fees of 1% of the amount paid early

HSBC Personal Loan

HSBC offers one of the best personal loans in the market with attractive interest rates. Here is a summary of what you can expect from HSBC:

• Interest rates of 3.2% p.a. (EIR 6% p.a.)
• Loan tenure of one to seven years
• Fast approval
• Minimum loan amount of S$1,000
• Low barrier for expats with an annual income of S$40,000
• Singaporeans and permanent residents should have a minimum salary of S$30,000
• A credit limit of 90%–95% is approved

Fees and charges

• Early repayment fees of 2.5%
• Overdue interest of 2.5%
• S$75 late repayment fee

Citi Quick Cash

Citi has loan terms for new and existing customers, and we review each term to make sure you're getting the best possible deal.

Citi Quick Cash for new customers

New customers get the following terms from Citi:

• Enjoy interest rates as low as 3.45 p.a. (EIR 6.5%) and a loan tenure of three years
• The minimum annual income of Singaporeans and permanent residents is S$30,000; S$42,000 for foreigners
• Quick application process
• You require a Citibank credit card or credit account.

Fees and charges

• No processing fee
• An early repayment fee of S$100 or 3% of the unbilled principal (whichever is greater) is imposed
• For a one-year loan, the interest rate is 0%, and for a longer loan term, the interest rate is 3.99% p.a.
• The cancellation fee is 3% of the outstanding loan amount or S$1,000, whichever is greater
• If a loan is more than two months late, it will be terminated
• No processing fees

Standard Chartered CashOne Personal Loan

Get instant cash to furnish your home from Standard Chartered. Here are some benefits and features you can expect when you apply for a Standard Chartered CashOne Personal Loan:

• Enjoy interest starting at 3.48% p.a. (EIR 7.99% p.a.)
• Instant loan approval and cash disbursement
• Get a fee waiver on your platinum credit card when you sign up for this loan
• You qualify for a S$50 annual fee if you pay upfront from the second year
• A loan of at least S$1,000 is required
• Maximum loan amount of up to four times of your monthly salary capped at S$25,000

Fees and charges

• Early repayment penalties of S$150 or 3% of the unbilled principal (whichever is greater)
• S$100 late repayment fee

Buying new furniture is an investment in your home. Get competitive rates with these best renovation loans. 

Read these next:
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Fixed vs Floating Home Loan Rates: Which One Is Suitable For You?
Home Insurance: Why Is It Important And How Do You Compare The Best Plans?
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