Ring Financing Options
If you want to make sure you’re marrying her for richer and not for poorer, make sure you’re looking at all of the fine print for the ring you’re about to put on her finger to ensure it doesn’t have an ill effect on your newlywed financial situation.
The purchase of an engagement ring is a huge deal. You may not have enough cash on hand to buy it unless you tap into your savings. But what if you don’t have enough in your savings to cover the cost?
You can’t argue with the fact that paying with cash is better than any other option out there when purchasing a diamond ring. If you can’t make that happen at the time of the purchase, there are some options for financing that may be available to you.
Men say that the average amount they are willing to pay for an engagement ring is $1,991, whereas women say $2,731 is more appropriate according to American Express. However, according to The Knot, the average ring costs roughly $5,978.
The practice of saving up cash to pay for an engagement ring to avoid going into debt is the best option, but it’s not feasible for everybody. Before you jump into financing an engagement ring, you need to know exactly what you’re signing up for.
You will find that private loans only last 3-5 years, so they have a two-year low-interest rate that will increase to a higher rate, such as one you would find with a credit card. Depending on what you would find with a private loan in terms of interest rates, credit cards may be a better option to a private loan.
You may see these referred to as an engagement ring payment plan, but they are legally considered a loan. The payment plan is the agreement that allows you to make regular payments before you take ownership. This is very similar to the Layaway program you find at certain stores. However, these are legitimate loans. You will have your credit score pulled and your score will be used to determine whether or not you get approved and how high your interest rates will be.
This is a special kind of financing. If your ring is going to cost several thousand dollars, you will see that the store may offer you deferred financing. This means the cost of the ring is low for a large loan, but too high for you to put on a credit card. You will get 0% interest for a few months that will accrue when the financing period is over. If you pay off the loan in full before the promotional period ends, you will owe no interest. If you don’t pay it off, the interest will accrue and it will be added to the loan balance.
You can choose to shop for a wedding ring locally or online. Shopping for cheap engagment rings online has become increasingly popular over the years. By 2020, online fine jewelry sales are expected to capture 10% of the global sales market, according to Research and Markets.
Additionally, you will find that online jewelers will take both major credit cards and private-label cards. However, retail cards tend to make the major cards look like somewhat of a bargain. Jewelry sales increase around Valentine’s day, but no matter when you buy the ring, you will find that the savings you get with a jeweler’s card only apply when you pay the ring off right before the 0 percent promotional period expires.