Should You Finance an Engagement Ring?

It’s not an easy thing to do when you need to buy an engagement ring and stick to a budget at the same time, especially if you don’t have much saved. Fortunately, there are plenty of other options such as personal loans and in-store financing or even a credit card.

Sometimes your heart wants to purchase something that your savings can’t handle. If you don’t have enough cash to use for the ring, there are several options.

Financing Within The Store

There are so many large chain retailers that offer in-house plans. Some even have no-interest financing. You need to watch out for high interest rates once the promotional period ends and penalties for not repaying the loan on time.


A personal loan may be your best bet because there are a lot of lenders you can choose from. You can get a loan through a bank, credit union, and even from an online lender. These loans will be unsecured and your interest rate will depend on how good or bad your credit score is and how financially stable you are.


A credit card with a low or no-interest period is a great option. You would have to pay it off before the intro APR expires. However, the rates for credit cards are generally higher than those of personal rates. They generally start out around 16% APR.

You will find that a majority of major jewelers offer financing plans that have a 0% interest rate for a short period of time. Opening a new retail credit account could have an effect on your credit score, especially if your credit isn’t much more than the amount you need to charge. This is because there’s something called a “debt usage ratio” that compare your available credit to the balances that you have. If your balances are more than 20-25 percent of what you have available, you may see a lower credit score. If you are approved for $3,000 in credit and you spend exactly that much on the ring, you will have a maxed-out account right from the start and it can hurt your credit.

What’s The Process?

You can finance an engagement ring like you would fiance anything else. You will apply for a long for the amount of the ring you are considering and if you’re approved, you can use those funds to buy the ring. Based on the lender you choose, the process may or may not be easy. If you choose to go through a bank, it may take a week or two to get your funds. If you choose an online lender, you will see your money almost instantly, but with higher interest rates attached.

Once you obtain your money, you can pay for the ring with a card, cash, or check,. As soon as you spend the money, you have to start paying it back. You will usually have one fixed monthly payment that lasts 1-7 years.

One positive thing about the loan is that there are very low interest rates, even 0%. They are also very flexible. These don't show up on credit reports, which is a huge plus unless you need the credit reference for credit building reasons.

Unfortunately, if you can’t make the payments for one reason or another, there will most likely be some tension between you and the lender that could cause issues between you and your spouse.

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