Are you planning on popping the big question to your significant other? If so, you need an engagement ring before anything else. Unfortunately, buying an engagement ring can be a pricey ordeal. However, there are several ways you can go about financing an engagement ring. Scroll down to learn about the best ways to get an engagement ring loan.
Ways to Finance an Engagement Ring in 2021
Let’s say you’re out shopping for an engagement ring for your partner, and you fall in love with a ring that costs more than your budget allows. After all, according to The Knot, the average cost of an engagement ring is $5,500.
Paying in cash is the best way to handle any large purchases. It saves a lot of money on the purchase APR, and you won’t have to deal with monthly payments or other fees. However, this isn’t always possible, and you may have to look into alternative ways to finance an engagement ring. We cover all the best ways to pay for a ring, from jewelry store advances to payday loans online.
Jewelry Store Financing
When you’re hunting for engagement rings, you’ll find that many jewelers offer financing options to their customers. These stores work with their own lenders that will most likely approve everyone. If you’re lucky, you could have your ring shopping coincide with a store’s sale. During these promotional periods, the jeweler will offer you a loan that’s either low or without any interest.
Though this option sounds amazing right off the bat, there are still a few facts you need to be aware of. Firstly, ensure you can pay off the ring within the loan term. Next, once the sale ends, you’ll end up dealing with high interest rates – 28% or higher. Additionally, the jeweler might charge you the interest you accumulated since your purchase, so you need to be certain you can afford the loan with its regular APR.
Lastly, always make sure to read the fine print. By doing so, you can educate yourself on the fees and avoid any unwanted issues later on.
0% APR Credit Card
Using a credit card can be a good way to gather money for an engagement ring. There are a few ways you can go about it. The best-case scenario would be to apply for a new credit card that offers an introductory 0% purchase APR. With these cards, you get between six months and a year’s worth of spending completely interest-free. Plus, you might even get cashback rewards on your purchases, depending on your credit card.
However, there are some downsides such as deferred interest. During the 0% APR period, this type of interest accrues in the background. If you don’t pay back the amount before the period runs up, you’ll need to pay interest on the entire balance.
Low-Interest Credit Cards
Similar to the 0% APR alternative, you can also apply for a low-interest credit card through your jeweler. Many jewelry stores offer this option to their customers and add a longer promotional period between two and five years. These cards come with interest rates that are far below the national credit card rate as well. Instead of the average 17%, you’ll only need to cover around 8% to 10% interest.
Still, there are some drawbacks you must know. Failing to repay the entire balance within the sale, or even being late on a payment, will result in your interest rate jumping up to 30%.
Another aspect you must pay attention to is the minimum payments. Usually, the minimum payment limit will be around one or two percent of the entire balance. Though paying the minimum may seem like you’re saving money, you could be running the risk of falling into a debt cycle.
Engagement Ring Personal Loan
If you didn’t find the previous financing options appealing, perhaps taking out a personal loan might be the thing for you. The cash advance will provide you with a sum of money immediately, which you can repay in monthly installments.
Many benefits wait for you if you take out a personal loan. According to data from the Federal Reserve, personal loans come with lower interest rates than credit cards. Moreover, many lenders ensure their loans come with fixed interest rates. This way, your monthly payments will remain the same until you pay them off. Though both options are available, the majority of personal loans are unsecured advances, meaning that you won’t have to back any of your assets as collateral to secure the loan.
Note that if you do go the unsecured loan route, you might incur higher interest rates. Since you’re not putting up any collateral, the lender still needs to ensure they have a safety net if you default. Additionally, applicants with poor credit might also face high interest rates.
Buy Now Pay Later Financing
The buy-now, pay-later method of financing has become quite popular recently. Lenders pair with certain stores and allow borrowers to pay off their purchases over time.
If you’ve found an engagement ring that your spouse-to-be loves, checking if the jeweler offers this policy is a great idea. It’s a much better alternative to paying with a credit card, and many lenders offer 0% interest rates if you meet their requirements.
Remember that if you choose this option, your retailer financing options will be limited. Moreover, late or missed payments will result in higher interest rates and late fees.
Apply for a Payday Loan
If your budget doesn’t allow you to spend a significant amount on an engagement ring, taking out a small loan online could be a solution. These quick cash advances come with short repayment terms, usually between two weeks and a few months. As for the amount of money, payday loans typically go up to $500.
So, if you find an engagement ring that appeals to you and is within that price range, a payday loan is the way to go! The application process for such loans through DirectLoanTransfer is fast and convenient. Just fill out the form on our website and you’ll receive appropriate offers from reputable lenders within minutes.
How to Finance an Engagement Ring with Bad Credit
Now, what happens if you have a bad credit score but still need financing? Many potential borrowers are discouraged by the state of their credit score. Luckily, though, many lenders consider other factors when reviewing your application—not just your credit history. These can include your employment status, monthly income, and bank account standing.
Moreover, there are lenders that specialize in these situations and offer bad credit loans. With these loans, the lender will only run a soft check on your credit report. This way, they can do their due diligence, but your credit score will remain intact.
Direct Loan Transfer has a wide range of lenders in its network where people can easily access the best loan options for their situation.
When you’re financing an engagement ring, the most important thing to remember is to read the fine print. Whether you’re getting a loan through a jewelry store, a credit card, or from a private lender, make sure you’re aware of all the terms. Additionally, before you take out any loan, make sure you’re actually able to pay it back. Overextending your budget on an expensive ring that takes ten years to repay isn’t the best way to start a marriage.