The Best Ways To Finance an Engagement Ring

An engagement is a significant investment. It might be among the biggest purchases you’ve ever made. The average national cost of an engagement ring is $5,500, according to The Knot’s 2020 Jewelry and Engagement Study, with a quarter of respondents spending between $1,000 and $3,000. With this price range, you could be thinking of getting an engagement ring on credit.

First and foremost, for significant purchases like an engagement ring, paying cash is always the best choice. Paying in cash will help you avoid interest charges, late payment fees, and other expenses, as well as prevent you from spending more than you can afford on a ring.

If purchasing an engagement ring outright in cash isn’t an option, you could be considering finance that brand-new sparkler instead. We explore the best ways to finance an engagement ring, from jewelry store financing options to a personal loan, and even paying via credit card.

Jewelry Store Financing

There are benefits to buying an engagement ring from a jewelry store. Before you buy it, your soon-to-be husband can try on various rings and settings to discover the ideal fit. The store might provide you with an excellent financing option, and your timing might line up with a fantastic sale.

However, do your homework before using a local jewelry store to finance an engagement ring. You should familiarize yourself with the following topics:

  • Any special offers: You’ll likely be given a cheap promotional interest rate. You might potentially save a lot of money with this promotion, but make sure you have the money to pay off the ring in that time frame.
  • Usual interest rate: After the promotion has ended, review the regular interest rate. Be sure you can afford the payment at the regular APR on the off chance that you don’t pay it off during the promotional period.
  • Hidden fees or charges: Before making a major purchase, it’s a good idea to read the fine print and familiarize yourself with any hidden costs associated with financing alternatives.

Credit Card

Placing an engagement ring on a credit card is an additional financing choice, but it requires some preparation. First, you should charge the ring to a credit card with an extremely low APR, ideally 0%. Additionally, the low APR should coincide with the time range in which you intend to pay off the ring. By making that preparation, you can avoid being hit with a high APR once the promotional time has ended.

You must have excellent credit to be eligible for a low- or zero-APR card. Unless you do, you might need to take some time to build up your credit score first. While you may be impatient to propose, taking your time and financing your ring the right way will save you a lot in the long run.

Personal Loan

A personal loan should only be used as a last option when paying for an engagement ring. Ideally, you should negotiate a 0% financing rate with the jewelry store or charge the ring to a credit card with a low or 0% APR. You should pay off the ring using those strategies before the promotional time ends. The best alternative for you might be a personal loan, though, if you don’t qualify for either of those due to a low credit score, a spotty financial history, or some other reason.

Consider these suggestions: Look around to find a personal loan with an interest rate that is less than 10%—this is a solid benchmark. Whatever price you ultimately settle on, be sure it’s less than the average annual percentage rate (APR), which for credit cards is about 16%. While the average personal loan term is anywhere from 12 to 60 months, it’s wise to make the term as short as possible to save money on interest.

Can you afford to finance that special engagement ring? How about one that’s a little less expensive? Use the calculator below to find out how much you’ll pay monthly.

One final consideration when financing an engagement ring is to make sure you’re buying a ring you can afford. It’s not the wisest financial move to start a new marriage to overextend yourself and finance a ring that you’ll be paying for in ten years.

After all, you still owe money for the wedding and honeymoon.

Frequently Asked Questions (FAQs)


What happens if an engagement ring is damaged during the period covered by the payment plan?

Whatever amount you owe will still need to be paid back regardless of whether you’re currently making payments on the ring. Your ring might, however, be protected by your homeowner’s or renter’s insurance. Additionally, you can buy specific insurance protection only for the engagement ring.

How much should you spend on your engagement ring?

Nobody can provide you with precise spending guidelines for an engagement ring, but you can look at national averages to get a sense of what others are doing. If the national average cost of an engagement ring is $5,500, and the national median average annual earnings are about $41,500, then you could say that most people spend about 13% of their annual salary on an engagement ring.

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