It’s not uncommon for family and friends to help out when it comes time to pay for an engagement ring, mostly because they want to see them succeed. Borrowing from somebody who is close to you is the best way to avoid those ridiculously high-interest rates. If you’re lucky enough, they will be more than willing to help you.
Do you really think it’s fair for your family or friends to foot the bill for your engagement ring purchase? The best way to avoid this problem is to carefully plan your finances rather than depend on your family and possibly have things become awkward by asking for money. You can always opt for a loan that keeps you committed to paying it off with guidelines. This also allows you to steer away from the emotional element that comes with borrowing money from a family member or a friend.
What Kind of Deal Are You Getting?
There are always pros and cons to any type of financing. Let’s take a look at some different options that may help you make your decision easier when the time approaches:
Your interest rate will determine how much your loan is going to cost you overall. That’s why it’s important to look at all of your options before you commit to one.
Credit Is Key
Your credit score is the key to good rates. Whenever you get a loan it comes with guidelines and if you follow them, you will be in better financial standing when it comes time to repay your engagement ring financed loan or make the last payment. If you have a high credit score, you will have a much lower interest rate. If you have a lower credit score, you will have a higher interest rate and may not even be able to get a loan. If you follow the guidelines that will help raise your credit score, you will be in much better shape
Things to Look For In A Loan
The first thing you’re going to want to do is to double-check your contract for any extras such as application and disbursement fees. There are also penalties and late fees to look for.
You will also want to confirm the amount of the loan. There are different loan amounts that will be given to you by different lenders. The max loan is around $25,000 to $40,000. This depends on how good your credit score is. You may be able to get a smaller loan if the ring you are eyeing is more modest.
Additionally, you may think that a longer loan term is a good idea since the payments are smaller, but the longer the loan is for, the more interest you’re going to accrue. It's best to pay the loan as quickly as possible.
Lastly, your credit score is a huge influence on your interest rate. There are lenders out there that won’t even look at your application if you have a poor credit score. The lower your credit is, the higher the interest rate will be.
As you can see, there are a lot of factors to consider. You need to review your credit score before you even consider taking out a loan. You shouldn’t have to pay more than what you need to, especially when you have a wedding to plan for.