A personal loan for your home renovation
Whether it's a new kitchen, a bathroom refit or getting a new home ready to move in, a personal loan lets you pay the contractor on schedule and repay in equal monthly instalments. This guide shows how to turn quotations into a loan amount, how much to keep aside for surprises, and how the term changes what you pay in total.
About RM 1,314.80 a month at 4.90% p.a.
A couple renovating the kitchen and bathroom of their terrace house before moving in. The quotation came to RM 40,000; they paid RM 10,000 from savings and borrowed the rest.
Apply nowWorked out at 4.9% p.a., the same rate for every period. Every approved customer pays 4.9% p.a., and your adviser confirms your amount and instalment before you sign.What it can cover
- Contractor's labour and workmanship, including hacking, tiling, plastering and painting
- Materials such as tiles, sanitary ware, paint, wiring and piping
- Built-in carpentry like kitchen cabinets, wardrobes and TV consoles
- Electrical and plumbing upgrades, grilles, doors and roofing repairs
- Home appliances such as air-conditioners, water heaters and a hob and hood
- Design or drawing fees, council or management permit fees, and debris disposal
How much to borrow
Build the budget from itemised quotations
Ask two or three contractors to quote on the same scope, item by item: quantity, brand or specification, and unit price for each line. A one-line quote such as 'kitchen renovation, RM 25,000' is hard to compare and easy to dispute later. Watch for 'provisional sums' (allowances for items not yet chosen, like tiles), because the final cost depends on what you pick. Base your loan on the quotation you accept, not on a rough guess.
Keep a contingency, ideally from savings
Renovations often uncover hidden problems, such as rotten pipes, termite damage or old wiring. Set aside a contingency, for example 10% of the quoted cost. Holding it in savings is cheaper than borrowing it: if you don't need it, you've paid no interest. If you do borrow it and don't spend it, use it to settle part of the loan early, which has no penalty.
Decide what comes from savings and what you borrow
Keep an emergency fund of a few months' expenses untouched, then use other savings for part of the job. In the example on this page, a RM 40,000 quotation with RM 10,000 from savings leaves RM 30,000 to borrow. Many people pay for the big items with the loan and buy smaller finishing touches, like curtains and lighting, as they go.
Choose the term by total cost, not just the instalment
At our rate of 4.9% p.a., RM 30,000 costs about RM 802.20 in interest over 12 months, RM 1,555.17 over 24 months and RM 2,320.12 over 36 months. Pick the shortest term whose instalment still fits comfortably next to your other commitments. Our Affordability calculator under Calculators shows how much room your budget has.
What you'll usually need
- Your MyKad, verified when you sign with our licensed lending partner
- Your last 3 months' payslips, or 3 months of bank statements showing your salary
- Optional: your EPF statement, which helps confirm a steady income
- If you're self-employed: business or personal bank statements, and your SSM registration or Borang B if you have them
- For your own planning: the contractor's itemised quotation and payment schedule
- If you live in a strata property: the management's approval for the works, before work starts
Before you borrow
Agree a payment schedule tied to finished work, for example a deposit, then payments after hacking and plumbing, after tiling and carpentry, and a final payment after a joint inspection. Keep part of the final payment until defects are fixed. Get a receipt or invoice for every payment.
A simple written contract should list the scope, materials, start and finish dates, payment stages, who handles debris disposal, and a defects period during which the contractor returns to fix problems. Check past work and reviews. Under the CIDB Act 1994, contractors carrying out construction works must be registered with CIDB (Construction Industry Development Board), so ask for their registration and check that their grade covers the size of your job.
Structural changes, extensions and some external works usually need approval from your local council. In apartments and condominiums, the management body (JMB or MC) usually has renovation rules, working hours and a deposit. Getting this done first avoids a stop-work order halfway through.
The loan is paid into your own bank account in one amount. Keep it set aside and pay the contractor from it in stages, so it isn't spent on other things before the final payment is due.
If you receive a bonus or the job costs less than planned, you can settle in full or make a partial prepayment of at least RM 1,000 with no penalty. A partial prepayment lowers your monthly instalment and keeps the same end date. See our Early settlement calculator under Calculators.
Questions
Can I use a personal loan if I rent, not own, my home?
Yes. The loan is based on your income and credit record, not on owning the property. If you rent, get your landlord's written agreement before you spend on works, because improvements usually stay with the property when you move out.
Should I refinance my housing loan instead?
A housing loan top-up or refinance usually has a lower rate, but it is secured on your home, often runs for many years, and can involve legal, valuation and stamping costs. A personal loan is unsecured, quicker to arrange and suits smaller amounts you want to clear over a shorter period. Compare the total cost of both before deciding.
Do I need to show the contractor's quotation?
You choose the purpose of the loan when you apply. The quotation isn't a fixed requirement, but having it ready helps you and your adviser settle on the right amount instead of guessing.
Can the loan be paid out in stages as the work progresses?
No. The loan is paid out in one amount to your own bank account. Pay your contractor in stages from that money. If the job costs less than you borrowed, use the balance to settle part of the loan early.
Are there any fees on top of the interest?
No. There are no processing or admin fees, and nothing is deducted from the amount you receive. Late payment charges, if any, are set out in your loan agreement.
Related guides
Other purposes
- Education loanCourse fees, professional certifications or your child's tuition, repaid monthly.Read the guide
- Medical loanTreatment, procedures or dental work not covered by insurance, repaid monthly.Read the guide
- Stock financingBuy stock ahead of a busy season and repay as sales come in.Read the guide
- Equipment financingMachinery, kitchen equipment or a POS system, paid off over 6 to 108 months.Read the guide
- Emergency cash loanAn urgent bill before payday. Borrow for days, not years, and repay in one go.Read the guide
Apply in about 3 minutes
Work out your monthly repayment first with our calculator. Your adviser confirms your rate before you sign, and applying doesn't commit you to borrow.