How to Finance an Engagement Ring

You've found the person you want to spend the rest of your life with, and now it's time to pop the question. But before you can get down on one knee, there's one big hurdle to overcome: the cost of the engagement ring. In The Knot’s 2023 Jewelry and Engagement Study,¹ the average engagement ring costs $5,000, with half of respondents spending between $1,000 and $4,000.

While these numbers may sound intimidating, several financing options are available to help you purchase the ring of your dreams without breaking the bank. In this article, we'll walk you through everything you need to know about financing an engagement ring.

Types of engagement ring financing

You have several options to consider when looking for engagement ring loans. Here are just a few methods for financing a ring:

Personal loans for engagement rings

Personal loans can be used for almost any expense and are a popular way to finance expensive engagement rings. These loans normally come with fixed rates, so you know exactly how much you'll pay each month and when the payments will be completed. With personal loans, lenders typically disburse your money faster and may offer long-term repayment if necessary.

OneMain offers personal loans ranging from $1,500 to $20,000, with annual percentage rates (APRs) between 18% and 35.99%. Term lengths for OneMain loans start at 24 months and may go to 36, 48 or 60 months. These loans are secured or unsecured, depending on the offer. A secured loan requires the borrower to back the loan with collateral, such as a home or vehicle. Unsecured loans do not require collateral. Go online to see if you prequalify to get your money as soon as possible.

In-store engagement ring financing

Some jewelers offer their own in-store engagement ring financing options. In many cases, you could get a 0% APR offer that could eliminate interest if the balance is repaid within a certain time. In-store financing may also have less stringent qualification criteria and may come with additional perks or rewards specific to the store.

However, you may encounter higher interest rates with in-store engagement ring financing, so this option may only be appealing with a 0% APR offer.

“Buy now, pay later financing”

Lenders like PayPal and Affirm, some credit cards and even individual merchants offer "buy now, pay later" financing. This allows borrowers to buy an engagement ring and pay it off in a set number of installments. Some of these lenders offer 0% APR deals, and the application process normally has no impact on credit scores.

Sometimes, you may have to make a down payment for this financing option. Lenders may also have credit limits, so choose wisely. And remember that the convenience afforded with “buy now, pay later” financing could cause borrowers to continually rely on it — which could quickly lead to mountains of debt.

Credit card

A credit card offers access to a line of credit that a borrower may repeatedly draw from and pay off. Some cards have 0% APR introductory offers. Because the loan is a type of revolving credit, you could also use a credit card to pay off other aspects of the wedding after repaying the engagement ring. A credit card could also help you build credit if you make your monthly payments on time.

However, credit cards may have higher interest rates that are variable, meaning the rates could fluctuate over time. There is also a danger of repeatedly racking up a balance on the card, a pattern that could be damaging in the long term. Remember, carrying a high balance can hurt your credit score.

Should you finance an engagement ring?

Now that you know the most common financing options, the biggest decision is whether financing an engagement ring is right for you. There is no one-size-fits-all answer, so consider a few things before you make the purchase of a lifetime:

• Assess your budget: Before committing to financing, assess your budget to determine how much you can comfortably afford to spend on the ring and how the monthly payments may fit into your overall financial plan.
• Review repayment terms: Pay close attention to the length of the repayment period and the frequency of payments. Longer repayment periods may result in lower monthly payments but could cost you more interest over time. Ensure the repayment schedule fits comfortably within your budget to avoid any financial strain.
• Look for additional fees: Scrutinize the financing agreement for any extra fees or charges, such as origination fees, prepayment penalties or late payment fees. Understanding these fees upfront can help you accurately assess the total cost of financing and avoid unexpected expenses down the line.
• Consider other options: Consider alternative methods for purchasing the engagement ring, such as saving up for the full amount and/or choosing a more affordable ring. You could also explore options like layaway plans or purchasing a pre-owned or estate ring, which may offer cost savings without the need for financing.

Get a personal loan for an engagement ring with OneMain today

An engagement ring symbolizes a new beginning and exciting new challenges. So make a commitment to the right person, right ring and right loan. Go online and prequalify for a personal engagement ring loan with OneMain — and say yes to a brighter future.

Sources:

1. https://www.theknot.com/content/how-much-to-spend-on-engagement-ring