Planning to propose to the girl (or guy) of your dreams?
You want to give the love of your life a proposal to remember, but engagement rings can be pricey. If you simply can’t wait to save up for the right ring, then financing an engagement ring can be a smart move – if you know what you’re doing.
There are plenty of ways to finance an engagement ring, each with their pros and cons. Want to discover the options? Then keep reading.
Why Should I Finance an Engagement Ring?
While it’s always preferable to save up for an engagement ring, sometimes it’s not the best option.
If you finance an engagement ring, you don’t have to wait so long before making the big proposal. Plus, it can offer you a more manageable way of paying for it. But as mentioned, you must be smart about it.
How Much Can I Afford?
Before we look at the best methods of financing an engagement ring, decide how much you can afford to spend on the ring. And be honest with yourself about it too.
There are several factors you should look at when determining your ring budget. These include your income and your expenses. Your expenses include monthly costs such as bills, food, and any repayments you have such as your student loan or car.
You should also consider your savings potential. Realistically, how much do you think you can save for the ring each month? Remember that to save enough you may need to cut out some of your luxuries and creature comforts. Marrying the love of your life comes with some sacrifice, after all!
You should also think about what your future goals are as a couple. Are you saving for a house, for example? Then you probably shouldn’t blow tons of cash on a ring to delay that.
Remember that many people get married when there are still other finances to consider. There are repayments to clear, houses to save for, plus most of us haven’t reached our full earning potential.
A pricy engagement ring is just one of the big financial commitments and you need to consider the rest of your finances when deciding on a budget.
Right, let’s get onto the different ways you can finance an engagement ring.
Start a New Credit Card with a 0% Apr Promotion
Opening a new credit card with a special promotional is a great option, and it may even be a good idea even if you do have enough money to pay for the engagement ring outright. That’s as long as you have good organization skills and can plan ahead!
Lots of credit cards offer a 0% APR promotional period which you can benefit from. Just make sure that you plan carefully to pay the cost of the ring back before the promotional period finishes.
Otherwise, you’ll be stuck with a high-interest rate – which is not how you want to start married life.
Take out a Personal Loan
Another good idea is to take out a loan for an engagement ring. If you want to avoid using credit cards, this option is ideal.
While you’ll have to pay interest on a loan, the monthly fee is fixed so you know how much to save and can feel reassured that the rate of your loan won’t increase down the line.
If you have bad credit, however, then engagement ring loans may not work for you. This is because the worse your credit score is, the higher the interest rate you’ll have to pay.
If you do have bad credit, it may be a better idea to go with a low-interest credit card.
Finance Through the Jewelry Store
Lots of jewelry shops provide in-store financing options, with many offering 0% deferred interest. However, be careful when choosing this option.
Deferred interest usually means interest is measured from your purchase date. If you don’t pay off the ring before the end of the promotional period as stated, you could be in heaps of debt.
If you’re interested in this option, ask yourself several questions and make sure you understand the process. For example, how long is the promotional period? What is the interest when the promotional period finishes?
How is the interest measured? Does it start from the day of purchase? Will the promotional rate be withdrawn if you miss a payment?
Get a Loan from Family or Friends
Many planning to pop the question turn to friends or family for financial help. This can be very useful if you have a bad credit rating, otherwise, you’d end up receiving a high-interest rate if you take out a loan elsewhere.
However, sometimes it’s tricky dealing with money issues with family. If you miss payments, while it won’t affect your credit rating, it can start family dramas and potentially ruin relationships.
If you do go down this route, always make an agreement as clear and official as possible, even if it’s with someone you’re very close with. A fancy engagement ring for your other half isn’t worth ruining other relationships for, is it?
The Methods of Financing an Engagement Ring
Whatever option of financing an engagement ring you go for, make sure to do your research and always scan the fine print before signing anything. Otherwise, that shiny sparkler engagement ring could become a huge financial headache – which is certainly not how you want to start married life.
Remember that a pricy sparkler won’t divorce-proof your marriage. So, make your decisions carefully. Whatever ring you choose, the ‘yes’ will be much more important than a costly ring in the long run.
If you decide to go down the cash loan route, here at Captain Cash we can help. Discover how our loan services work for you here.