How to Fund an Engagement Ring in 2021


If you want to ask the question, your finances might not be the first thing you think about – but they might be the second. Engagement rings and the following weddings are among the most expensive purchases in life. So it’s important to start with your right foot.

The average cost of an engagement ring in 2020 was $ 5,500, according to wedding website The Knot. The cheapest way to pay for a ring is through savings. However, if you haven’t saved up or are reserving your savings for the big day, here are engagement ring funding options to help cover the cost.

Get matched with an interest-free credit card

You can finance the ring with no interest with a 0% introductory credit card. These cards have promotional periods ranging from 15 to 18 months during which you will not pay interest on your purchases. Additionally, choosing a card that also grants travel rewards can mean cash for a honeymoon.

Note the credit limit on the card. If the ring purchase exceeds 30% of your total available balance, your credit score can take a hit.

When it is best: Zero interest cards are best if you qualify for a card with a high credit limit and can cash out the balance within a year or so to avoid high interest rates that come in after the promotional period.

Qualifications: You usually need good to excellent credit (690 or higher FICO) to qualify.

Something new: buy now, pay later

Buy-now-pay-later services such as To confirm, Klarna and additional payment can split your purchase into smaller installments, sometimes with little or no additional interest. These companies work with all types of vendors including jewelers Brilliant Earth and Best Brilliance.

The lender may check your balance to qualify you for funding, but often won’t report payments to the credit bureaus so using a loan is unlikely to help or hurt your credit. This financing option is also a great alternative if you are concerned about using too much of your credit limit on a credit card.

When it is best: These point of sale loans are best for large, one-time purchases when you can qualify for a low interest rate and want a minimal impact on your bankroll.

Qualifications: Affirm and Klarna offer pre-qualification so you can see which interest rate and payment plan you can qualify for without affecting your creditworthiness. According to Afterpay, it will check the amounts available on your debit or credit card, as well as your business history.

Take out the financing with your jeweler

Some jewelers offer payment plans that include low or no-interest advertising periods, but high interest rates – 28% or more – after the period is up.

The promotional periods for jewelry cards are usually long. However, if you still have a credit after the promotion has ended, the jeweler can retroactively calculate the interest accrued since your purchase. This differs from interest-free credit cards, which only charge interest on credit that remains after the promotion has ended.

When it is best: A jeweler payment plan may be the right choice if you qualify for a low-interest or zero-interest plan and can pay off the ring in full before the promotion ends.

Qualifications: You need good or excellent balance (690 or higher FICO) to qualify for many business credit cards.

Something borrowed: engagement ring loan

Well qualified borrowers may receive a low interest rate on a personal loan that they can use to purchase an engagement ring. These loans offer a lump sum that you repay in monthly installments.

Annual personal loan percentages start at around 6%, and the repayment period is typically two to seven years. The fixed monthly payments are easier to budget than revolving payments with credit cards.

Use one personal loan calculator to view the estimated interest rates and payments for engagement ring loans based on your creditworthiness. Pre-qualification This allows you to view personalized prices and conditions without affecting your creditworthiness.

When it is best: A personal loan is a good engagement ring financing option if you qualify for a low interest rate and need two or more years to repay the ring.

Qualifications: Borrowers with excellent or good credit, low existing debt, and high incomes are more likely to be eligible for the lowest personal loan interest rates. Those with low credit scores can still qualify but pay more interest.


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