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Your Engagement Ring Financing Options

When it comes to financing an engagement ring, common options include personal loans, jewelry store financing, credit card special financing and borrowing from friends or family. But take time to explore your options, because some lenders may offer you more favorable terms and interest rates than others.

4 ways to finance an engagement ring

  1. Get a personal loan
  2. See what financing options are available at the jewelry store
  3. Use a credit card with a 0% promotional APR period
  4. Borrow from friends or family

1. Get a personal loan

One of the options available to you for financing the purchase of an engagement ring is a personal loan. Although a convenient option with potentially fast funding, personal loan terms and their availability heavily depends on your creditworthiness.

Lenders like LightStream offer high starting borrowing limits, while others like LendingClub offer general-purpose unsecured personal loans for the borrower to use as they please. Finally, lenders like Affirm partner with popular retailers and allow you to apply for and use a personal loan during checkout.

Engagement ring financing lenders
Lender Terms Requirements
Earnest
  • 5.99% to 17.24% APR
  • 36 to 60 months
680 minimum credit score
SoFi
  • 5.99% to 19.96% APR
  • 24 to 84 months
680 minimum credit score

 

Personal loans can be an effective financing choice for people who can’t save up to buy a ring in cash and who may not qualify for a financing option with a 0% APR introductory period, such as what may be offered by certain credit cards.

However, there are some downsides to look out for with this type of financing. First, loan interest rates are based partly on your credit score. If you have a fair or poor credit score, there’s a good chance you’ll get stuck with a high interest rate. Also, many personal loans require a loan origination fee, which you probably won’t have with other financing options.

2. See what financing options are available at the jewelry store

Because they know that many consumers can’t afford to buy an engagement ring in cash, many jewelry stores offer their own financing options, which can offer lower APRs than you may find on a personal loan.

Some can come with a promotional 0% APR. These APRs can last for 12 months or longer, after which the APR will adjust to its normal rate. One thing to be mindful of, though, is deferred interest. If you don’t pay off your balance within the promotional period, you’ll be charged interest back from the original purchase date. These financing options may have other hidden fees as well.

3. Use a credit card with a 0% promotional APR period

These days, there are plenty of credit cards on the market offering a 0% introductory APR for a particular period of time, often between 12 and 18 months. If you know you’ll be able to pay off the total amount before that introductory period ends and you meet lender creditworthiness standards, this route can save you money because it’s basically an interest-free loan.

This financing option can have extra perks if you choose a credit card with both a 0% APR period and cash back — consider it as a small discount on your ring. However, there are a few downsides to this option:

  • Not everyone can qualify for a credit card with a promotional APR period
  • Most of the credit cards that fall into this category require at least a good credit score, which is 670
  • If you have bad credit, you’ll likely have to consider a different engagement ring financing option

Another factor to consider is interest. Ideally, you would pay off the balance before the introductory APR period ends. But if that’s not the case, you may end up paying upward of 25% interest on the remainder of your balance. Review the terms and conditions carefully before you apply.

If you choose this financing option, do the math to figure out how much you’d have to pay each month to repay the loan in its entirety before your promotional period ends.

4. Borrow from friends or family

Depending on your family situation, you may have family and friends who want to contribute to your celebration. While it may not be the norm anymore that the bride’s parents foot the bill for the wedding, a 2019 WeddingWire report still finds that parents and other family members are contributing nearly 55% of the total cost of weddings.

If you have loved ones who want to chip in for the big day, you may consider asking them to loan you the money for the engagement ring. There are a couple of benefits to this option. First, you can avoid inquiries on your credit report as you apply for financing. You also save yourself the interest payments you might run into with one of the other options.

Before you finance your ring, consider the price

While financing an engagement ring is certainly an option, it might not be right for everyone. In 2019, couples are paying an average of $5,900 for a ring, though the number varies regionally.


Before making the choice to take on that much additional debt, consider the other options available to you. While financing a ring might seem tempting, going a different route can help you to avoid bringing more debt into the marriage.

If you can, talk to your fiance about a budget

It’s no longer the norm that the person popping the question buys a ring and gets down on one knee without discussing it with their partner. The Knot reported that only about a third of proposals are truly a surprise, and a majority of couples discuss the ring purchase ahead of time.

Couples who open this line of communication have the opportunity to discuss the engagement ring budget as a team. With marriage just around the corner, this is a great opportunity to start talking openly about finances. It can be a part of a larger discussion about your wedding budget and future financial goals.

Consider opting for a more economical ring

While diamonds are still the overwhelming favorite center stone for engagement rings, there are other options on the market that can help reduce the cost of the engagement ring if your partner is on board.

For example, moissanite is the second most popular center stone. These stones resemble diamonds but can save you thousands of dollars for a one-carat stone. Other popular stone options that can help you reduce your ring budget include sapphire and morganite.

You can also save money on the engagement ring by choosing a more affordable band option. Silver and white gold are both more economical than platinum. Additionally, you can opt to buy the stone from a diamond wholesaler rather than a retail store to save upwards of 25% on your diamond.

Saving up months in advance using a budget

Once you’ve decided to pop the question, postponing can often feel burdensome. But giving yourself some extra time to save up for the cost of the ring might be the right choice.

An engagement ring is a big investment, but it’s just one of the many expenses you’ll have when it comes to planning a wedding. The Knot’s 2019 Real Weddings Study found that couples today are spending an average of $33,900 on their weddings.

Allowing yourself the time to save can help to ensure you’re ready for the cost of the engagement ring, as well as the wedding expenses to come.

 

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