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Purchasing an engagement ring is a significant investment. In fact, it could be one of the most significant purchases you’ve ever made. It’s a task that necessitates patience and decisiveness in the research process. An engagement ring costs $5,500 on average. This pricing range indicates that you could be thinking about financing an engagement ring.
So, how to finance an engagement ring?
How to Finance an Engagement Ring with Poor Credit
If your credit score isn’t up to snuff, getting a loan can be difficult. Many of the best and most appealing credit plans may require that you have excellent credit. Otherwise, the plan will revert to something far less appealing.
Remember, if anything appears too good to be true, it probably is. This is especially true in the financial sector. Although, you have a few options how to finance a wedding with poor credit and purchase an engagement ring:
Personal Loans as a Source of Funds
You can apply for a personal loan instead of financing through a jeweler. A personal loan provides you with the funds you require right away, with the option to repay the loan over time.
There are two types of personal loans: secured and unsecured. Secured loans demand a kind of collateral, such as a car or a boat, in the event that you are unable to repay the loan. Unsecured loans don’t demand any collateral, but they do look at your credit and financial history.
Save Money and Pay with Cash
If you have bad or no credit, this is by far the greatest alternative for purchasing an engagement ring. Many lenders will provide you with bad credit financing, but it will almost always come with exorbitantly high-interest rates that you will be paying for the rest of your marriage.
That’s why biting the bullet and saving up until you have enough money to buy your ring in cash is a better alternative.
You may have to make some sacrifices to do so, but it will be far more beneficial in the long term than taking out a predatory loan.
If you have low credit and a small amount of cash upfront, you may need to be more conservative with your spending. You certainly can’t afford a pricey, extravagant ring, but that doesn’t mean it’s your only option. It is possible to acquire a beautiful, meaningful ring for a reasonable price by shopping wisely and dealing with trusted merchants.
Purchasing Second-Hand
If your finances aren’t in good shape, going out and spending a lot of money on a ring isn’t going to help. It will be better for you and your fiance to save money by purchasing a used ring rather than purchasing a new one. Talk to your fiance about it to see whether it’s a good fit for both of you.
Credit Cards that do not require a down payment
Many credit cards are available with no down payment and a 0% APR introductory period. While using a credit card to finance a significant purchase like an engagement ring is not a good idea due to the interest rates charged, if you’re confident you’ll be able to pay the balance off within the promotional time, this can be a viable option.
While planning your dream proposal can be really romantic, paying off debt is not. Make informed choices about the engagement jewelry you buy to get your marriage off to a good financial start. Take your time to investigate options, save money, and make the best decision for you and your spouse.
Alternative Options
A Jewelry Store as a Source of Funds
A financing option is available at almost every major jeweler. They normally advertise interest-free credit for a set length of time, such as six or twelve months.
Financing “offers” given by well-known physical and mortar retailers are easy to be enticed by. However, these financing “offers” frequently come with a snag. If you don’t pay off the entire balance during the promotional period, you’ll be charged hefty interest rates and could end up spending up to 50% more for the ring than it was originally purchased for. When you apply for financing, a jeweler will search your credit report, so choose your vendor first to minimize repeated inquiries on your credit report.
Using a Credit Card as a Source of Funds
Engagement rings, like many other significant purchases such as new furniture or appliances, can be financed with a credit card. While some credit cards are better than others, interest rates will almost always cause you to pay extra for your ring.
If you do decide to use a credit card to pay for your engagement ring, seek one that charges no interest (at least for a promotional period). If you can’t find a credit card with $0 interest, go with one that has a good rewards program. You can earn cashback or reward points that can be used to pay for items like vacation or supplies.
Though we don’t recommend paying for your ring with a credit card, make sure you can afford the minimum monthly payments. If you don’t, you’ll be paying for your ring for the rest of your marriage.
Other Alternatives
If you need help buying an engagement ring but don’t want to take the traditional way, consider the following alternatives:
- Borrow money from a family member or a friend.
- Work a second job to supplement your income.
- Take money out of your retirement account.
- Sell any items you don’t use any longer.
Getting financial assistance buying your engagement ring shouldn’t put you in a bad position. If you don’t have the money to buy the ring you want, consider cutting your spending or waiting a few months until you can save up.
