couple holding hands across mountain background with woman wearing engagement ring

Choosing the Best Engagement Ring Financing for Your Budget

Your engagement ring signals your intention that you are going to marry the person you love.

You might have a shorter or longer engagement, depending on how much of a hurry you are in and how elaborate of a wedding you want.

In the meantime, you can show off your ring and think about what the future holds for you and your partner.

Taking an engagement ring loan becomes a viable option if you want a more expensive ring and don’t have the cash to pay for it all at once. We’ll discuss engagement ring financing in the following article.  

close-up of woman wearing an engagement ring while holding man's hand

What Does Financing Mean?

When you finance something, you borrow cash from a creditor and pay for the item now, though you don’t have the money to purchase it all at once. You can set up a finance plan with the jeweler selling you the ring, or you might borrow money from another entity, like a credit union or bank.

You have a few different options regarding engagement ring financing, so let’s review each one.

Getting a Personal Loan

You can approach a lending entity like a credit union or bank and ask for a personal loan for your engagement ring. If you do that, they’ll look at your credit score.

They will also probably ask about your employment. If you have a steady job and at least decent credit, that likely makes you a suitable loan candidate.

This route might be your best bet if you have solid credit. You may get an interest rate on the loan as low as 8% or perhaps even lower than that. This is considered a reasonable interest rate. 

Higher rates are less desirable, but they might be all that a bank or credit union offers if you have less-than-stellar credit. You should avoid borrowing money for engagement ring financing from lending entities with dubious reputations.

Using a Credit Card

You can finance the ring by putting some money down and then putting the rest of the cost on your credit card, assuming you have a big enough credit limit. You can even put the ring’s entire cost on the card.

Generally, if you can get a lower interest rate through a bank or credit union loan, that makes more sense. The rates that credit card companies charge are often higher than what a bank might give you if you have at least decent credit.

Setting Up Financing with the Jeweler

You can also cut out the middleman and set up financing directly with the jeweler. That simplifies matters somewhat.

The time this makes the most sense is probably when the jeweler offers you a financing rate with very low interest or even no interest. Pay attention when you sign up for these deals, though.

Usually, that low-interest or no-interest rate only applies for a limited time. Once that time is up, the interest kicks in, and it can be close to 30% in some cases.

Which Choice Makes Sense for You?

If you want to finance your engagement ring, jeweler financing might work if you can pay back the money during the no-interest or low-interest rate period.

If you use a credit card, the best choice is one that has a zero-interest introductory rate. If you can pay off the ring’s cost before the interest kicks in, this option makes sense.

As for borrowing money from a credit union or bank and using this cash infusion for the ring, you’ll likely do it if you qualify for a low rate, like 8% or lower. This choice usually works best for individuals who need longer to pay back that money, such as a year or more.

Consider how much money you have to put down and how nice of a ring you want before making your decision. Your credit score and employment situation should also come into play.