One of the most important steps you’ll make, other than actually getting married, is buying the engagement ring. It’s a huge deal, so isn’t it okay to take a chunk of your savings? You would think so, but maybe not.
There’s never a right time to take money out of your savings, except for an emergency. If you have cash laying around, it would be the ideal way to buy a ring for your loved one. However, if you are like the rest of us and don’t have the money readily available; then you may consider taking out a loan. If you are looking for some alternatives to buying a ring with your savings, then keep reading.
What About Deferred Financing?
Deferred financing is an option for those looking to purchase something that isn’t astronomically high, but also too high for a credit card. Deferred financing gives you roughly 12-months to pay off the loan with a 0% interest rate. If you can't pay it off within that timeframe, you will have to pay the interest on it, potentially putting you into serious debt.
You may or may not have heard of it, but it’s an alternative to traditional financing. You can use certain websites to get in touch wtih potential investors. If you are looking for a loan, you can simply go on the website and fill out a form. You will have to fill out some basic information and what you are looking to get out of the loan. You will then have your application reviewed by potential investors. Depending on who you choose, some of the services may allow the person wanting to lend you money to set interest rates that they would be after if they were going to give you the money. However, these rates may be extremely high and unreasonable.
Personal Loan, Maybe?
If you aren’t a fan of the deferred loan then maybe consider a personal ring financing loan. These usually last from 3-5 years and will have an interest rate above 10%. There will also be no 0% interest rate. They are costly because they are unsecured and you will have to pay the interest immediately. If your credit score is in the gutter, a personal loan isn’t the best choice for finance. If you have a low credit score, you are going to pay at least 20% interest, if not more. There’s an upside, though. If you have a decent job and a credit score that isn’t completely ruined, then you may get some favorable rates.
Are You Ready?
One thing to remember is that a credit card is always on the table. There are a lot of institutions that give you a bonus when you apply for a card. You could be entitled to lower interest rates if you sign up with the company and spend a certain amount. Since the price of a standard engagement ring is costly, then you may have no problem covering the minimum spending requirement for the credit card promotion.