Engagement Ring Financing in 2023
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Shiny new engagement rings can represent the start of a new chapter in your life, but they can come with flashy price tags that can make it difficult to purchase upfront. According to The Knot, the average cost of an engagement ring is about $6,000. Engagement ring financing like in-store funding or credit cards can make that gem-studded jewelry more affordable and may even help build your credit.
Jewelry store financing
Best for: Consumers with good credit who want to avoid paying interest and can afford to repay within the limited zero-interest repayment terms.
How to qualify: Jewelry stores generally don’t provide insight on their credit requirements, but those with good to excellent credit are most likely to qualify.
If you want to go straight to the source, some jewelry stores offer in-house financing options, including store credit cards, with little to no interest as long as you meet certain requirements. For instance, some companies offer promotional zero-interest financing as long as you pay off your balance within the predetermined repayment terms.
On the other hand, some jewelry stores charge annual percentage rates (APRs) as high as 29.99%. While this is lower than options such as personal loans — which we describe below and are generally capped at 36% — this can still feel like a financial burden for consumers with tight budgets.
Here are financing examples from some of the largest U.S. jewelry retailers:
- Jared: With no down payments required, Jared offers a credit card with interest-free six-to 18-month financing as long as you repay within that time frame. Jared also provides 36-or 48-month financing, though these options come with 16.99% APR in those time frames and 29.99% APR if you take longer to pay.
- Kay Jewelers: This company offers the option to finance with 0% to 20% down and a $500 minimum purchasing limit. Their credit card —with no down payment or minimum purchase amount — also allows you to pay back in 18 months or less with no interest, or in 36 months with 16.99% APR (29.99% APR if you take longer).
- Zales: Zales has interest-free six- to 18-month financing if you repay within that time frame. Financing for 36 months comes with a 16.99% APR, while longer timelines come with 29.99% APR. No down payment is required.
All three retailers also allow customers to purchase using Affirm, a buy now, pay later (BNPL) site.
Personal loans
Best for: Borrowers looking for predictable monthly payments and who would prefer receiving a lump sum over a line of credit.
How to qualify: Personal loan eligibility criteria varies from lender to lender, but generally, lenders look at your credit score, income and debt-to-income (DTI) ratio.
Instead of getting a line of credit, personal loans may allow you to access a lump sum of money to buy an engagement ring.
Personal loans come with fixed APRs and minimum monthly payments so you’ll know how much you owe each month. They also come with set repayment terms, so you’ll know exactly when you’ll be done paying your loan off. Use a loan calculator to confirm the loan amount that works with your budget.
While some lenders offer loans as high as $100,000, you can also apply for a small personal loan if you’re on a tight budget. However, keep in mind that you may have to pay an origination fee on a personal loan, which can get as high as 10% of your total loan amount, depending on your lender.
Credit cards
Best for: Borrowers with good credit that can qualify for 0% intro APR and who can pay off the balance within the promotional repayment period.
How to qualify: While criteria varies based on the credit card issuer, generally, you’ll want to have a credit score of at least 660 to qualify for a 0% APR card.
Instead of getting a lump sum of cash, consumers could instead apply for a credit card with 0% intro APR. This option not only allows you to avoid paying interest for a certain length of time, but, down the road, you could use the credit card to finance other purchases after your engagement ring is paid in full.
These 0% intro APR promotions can last up to 21 months depending on the credit card issuer. Repay the entire balance off the card before the promotional period ends or you’ll be stuck with interest charges on the remaining balance.
Buy now, pay later
Best for: Borrowers with good credit who plan to make a small purchase and can afford to pay it off within a particular repayment period.
How to qualify: BNPL eligibility criteria depends on which site you plan to use. Affirm considers your credit score, credit utilization ratio, payment history and income.
Buy now, pay later (BNPL) is a financing option that has exploded in popularity in recent years and is available with most retailers. In particular, Affirm is a popular option among jewelry stores as a way for consumers to buy a ring.
With Affirm, consumers can either take out a loan or use a “Pay in 4” plan. A loan may include interest (up to 36% APR), while “Pay in 4” comes with no interest and splits your purchase into four equal payments that you’ll pay over time.
Save up for an engagement ring
Best for: Consumers with poor or fair credit, but who have enough flexibility in their budget to save up for a ring.
How to qualify: Focus on budgeting tools to stay on top of your financial goals.
If you’re not sure you’ll qualify for financing or would rather pay upfront for a purchase like an engagement ring instead of taking on new debt, you can set money aside and pay in cash. While this can take time, you’ll save money by avoiding interest.
Researching budgeting tools and sticking to a plan can go a long way toward accomplishing your financial goals. The Consumer Financial Protection Bureau (CFPB) offers worksheets to help track your income, spending and savings.
Frequently asked questions
Yes, even if you find yourself with a low credit score, you can still finance an engagement ring. Consumers can look into bad credit loans as well as credit cards for poor credit, though you may have to pay more in interest rates compared to those with good credit.
Couples spend an average of $6,000 on an engagement ring and can quickly become one of the most costly items in your wedding budget. However, this is by no means the standard and many jewelers offer much more affordable engagement rings as well as financing options.
While each lending process is different, financing an engagement ring generally involves filling out an application to see if you prequalify for a loan or credit, then verifying the information you provided. Some lenders may also run a hard credit inquiry on your credit reports. If you’re offered financing, you’ll have to accept your terms and close on your loan or line of credit before accessing the money.