4 Easy Ways To Finance Your Engagement Ring

Getting engaged is a major life milestone. Before you can pop the question, though, you might need to consider how to finance an engagement ring. An engagement ring can be costly—the average cost was $6,000 in 2021, according to The Knot.

If you can’t cover the expense from your own savings, you may explore alternative options for engagement ring financing. Here are some strategies for spreading out the cost over time.

1. Personal Loans

If you want to pay back the cost of the engagement ring over several years, a personal loan could make sense. Personal loans can be used for almost any purpose, including buying an engagement ring or paying for a wedding.

When you borrow a personal loan, you get a lump sum up front and pay it back monthly, usually over a period of one to seven years. Personal loan interest rates typically range from 6% to 36%, depending on your creditworthiness and lender.

Borrowers with very good credit scores of at least 740 will likely qualify for the lowest rates, but some lenders accept scores as low as 560. If your credit is significantly lower, your personal loan may come with a higher rate.

Many personal loan lenders let you check your rates online through prequalification, allowing you to get a sense of your offers with no obligation or impact on your credit score. If you’re interested in an offer, use a personal loan calculator to estimate your long-term costs of borrowing.

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Before borrowing a personal loan, make sure you can afford the monthly payments. On-time payments can help your credit, but missing payments can cause considerable damage and make it difficult to qualify for other types of financing in the future.

2. 0% APR Credit Card

You can also apply for a 0% annual percentage rate (APR) credit card. Some cards give you anywhere from 15 to 21 months of 0% APR on purchases, meaning you can carry a revolving balance without accruing interest charges.

Most providers require a credit score of at least 700 to qualify for one of these cards.

This option could make sense if you can pay back your engagement ring balance before the 0% APR period ends. If you’re still carrying a balance after this time, you’ll be charged interest on it.

It’s also best if the cost of your ring doesn’t exceed 30% of your available credit. If your credit utilization ratio creeps over 30%, you could see a drop in your credit score.

As you shop around, consider credit cards that offer both 0% APR and rewards points on your purchases. If you’re charging a pricey engagement ring, you might earn some rewards points you can turn into cash or miles for your honeymoon.

3. Buy Now, Pay Later

Buy now, pay later (BNPL) services like Affirm, Afterpay and Klarna have become more popular in recent years. These financing companies let you break up a purchase into several smaller installments with no or low interest.

Many BNPL services offer 0% interest if you pay off your purchase within a certain time period. Some also let you stretch out the payments over a year or more, but you might have to pay interest on the amount.

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You can consider using BNPL from many major engagement ring retailers, including Brilliant Earth and Kay Jewelers. Unlike borrowing a personal loan, you won’t have to submit a lengthy application or submit to a hard credit inquiry.

Instead, the BNPL service will run a soft credit check, which has no impact on your credit score, and give you an instant approval decision. Some of these services don’t charge late fees, but they may report late payments to the credit bureaus. Unfortunately, on-time payments probably won’t be reported, so they won’t help your score.

4. Jeweler Financing

Some jewelers offer engagement ring financing when you purchase a ring, allowing you to pay back your purchase over time. They might partner with a loan company to provide a loan or offer a store credit card with a low- or no-interest promotional period.

This option could make sense if you have strong enough credit to qualify for the type of financing and can pay off the ring before any promotional period ends. If you still carry a balance after the period ends, you could wind up having to pay hefty interest charges.

Can You Finance an Engagement Ring With Bad Credit?

Having bad credit can make it difficult to qualify for engagement ring financing. If you want to borrow a personal loan or open a 0% APR credit card, you’ll likely need strong credit to qualify. However, some lenders cater to bad-credit borrowers and/or let you apply for a loan with a creditworthy co-signer to boost your chances of approval.

It may also be easier to qualify for BNPL financing than for an unsecured personal loan or credit card. If you have time to work on your credit before you pursue engagement ring financing, you might have an easier time qualifying or end up with better interest rates.

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Paying down debt balances, making on-time payments on loans and reducing your credit utilization ratio are all steps you can take to boost your credit score. You might also order a free copy of your credit report from AnnualCreditReport.com to review your accounts.

If you spot any negative marks, find out what you can do to get your accounts back into good standing. Keep an eye out for reporting errors, too, and try disputing any mistakes you come across to get them removed from your report.

When Should You Finance Your Engagement Ring?

It may make sense to finance your engagement ring if you don’t have enough savings to cover the cost. Even if you do have enough, it’s probably not a good idea to drain your savings account completely, as you want some funds to fall back on in the event of an emergency.

The timing might also be right if you have strong credit and can qualify for a low-cost financing option. A 0% APR credit card or a BNPL service, for instance, can allow you to pay off your purchase over time without accruing any interest, as long as you don’t fall behind on your bill.

Before purchasing your engagement ring, compare the pros and cons of your various financing options. Consider both the long-term costs and impact on your credit to determine which type of engagement ring financing is the best for your situation.