Proposing marriage with an engagement ring is a generations-old practice, but the cost of an engagement ring can be high. Although it’s financially savvy to set savings aside in advance for this hefty purchase, that might not be feasible for your situation.
Instead, you can choose to borrow money to buy an engagement ring. There are a handful of ways to do so, such as with jeweler financing or taking out an engagement ring loan.
Costs of an engagement ring
There’s no rule that enforces you to get an engagement ring of a particular size, shape or setting. However, you might’ve heard the outdated rule of thumb that an engagement ring should be worth approximately three months of salary. Diamond jeweler De Beers popularized the antiquated idea of tying a ring’s price to your monthly earnings in its 1930s marketing campaign. Yet, couples still spend a significant amount of money on an engagement ring.
The Knot’s 2021 Jewelry & Engagement Study found that the average engagement ring price that consumers paid increased to $6,000, compared to $5,900 in 2019. Of the respondents, almost 30% said they went over their engagement ring budget.
Multiple factors go into the price of an engagement ring. The same study found that the precious stone that’s used in a ring’s design is a notable factor for price:
- Clear diamond ring: $6,800
- Gemstone: $2,500
Other price factors include the ring setting, metal type, diamond or gemstone details like rating and size, and the region you live in.
Once you’ve determined your ring budget and have found the perfect one to pop the question with, you’ll need to decide how to pay for it if you don’t have cash on hand.
Jewelry store financing
Many major jewelry retailers offer in-house financing to help their customers pay for an engagement ring. This financing option is conveniently done in-store or through the jeweler’s online platform. It’s an installment loan wherein you get to walk out of the store, ring in hand, and make incremental monthly payments toward the loan balance, plus interest.
Generally, jewelry financing offers more flexible credit requirements compared to borrowing a loan from a traditional bank. Some retailers might have financing requirements, like a minimum purchase amount, and offer various repayment terms.
Best for: Buyers who want a convenient financing source and those who might not have strong credit.
Using a credit card to finance an engagement ring can be a strategic option for responsible borrowers.
For example, let’s say you have strong credit and qualify for a …….