How to pay for a diamond ring with finance
Getting married is supposed to be all about the love and creating a life together, and the ring is a major precursor to The Big Day. But how to proceed if you need to buy a ring, but cannot afford to go into debt?
An engagement ring is one of the biggest purchases you are likely to make, but it is vital that you resist all temptation to dip into your savings to be able to afford one.
As with any large purchase, cash remains king, and there is no denying that it is and always will be the best option. But what if, right now, cash is also notably absent? You don’t need to delay popping the question (nor avoid it altogether), but take care to carefully investigate all financing options before making a call.
How much is too much?
Popular opinion amongst men has indicated that just under the $2000 mark is an acceptable average, while the answer from women has been as high as $2500 - $3000. However – and hold onto your seats – many online sources cite an appropriate cost for a wedding ring to be a wallet-splattering $6000!
While many will argue in favor of saving and frugal living in the pursuit of cash, it is not possible for everyone. If you are looking at financing an engagement ring, you need to be very clear on all terms and conditions, and know what you’re letting yourself into.
Private loans can be a good option, as they are often only 3-5 years, offering low interest for the first two years and then goes up, similar to credit cards. When you choose you lender, make sure to critically compare rates and repayment terms.
What’s in a name?
Many stores offer engagement ring finance which is marketed as a payment plan, but which in reality is a loan. The difference is that, with a payment plan, you pay off the amount in small payments before taking possession of the item, whereas a loan will grant you the capital upfront, which you will have to pay off later.
Many ways to shop
In the same way that you can get different prices from different physical shops, you can also expect prices to very when shopping online. In fact, online jewellery shopping is becoming more popular every day. Most branded jewellers, whether online or in a physical store form, offer branded credit cards. But be warned – if you do not pay off the loan before the 0% interest period is over, you are in for major interest implications.
When you make a high-value purchase, many stores will offer deferred financing. This is angled at amounts that are not great enough to justify a larger loan, like a car loan, but are too large to put on a credit card. If the entire loan is paid off before the period ends, you will not owe further interest. If not, however, that interest will accrue, creating a concerning debt pattern.