Home > Managing Debt > The Crazy World of Engagement Ring Financing

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Ah, to be young and in love. When you find that perfect match and gather the courage to pop the question, it feels like you’ve got the world on a string. Then you go shopping for an engagement ring and discover the true price of love.

These days, you can expect to fork over more than $6,000 for an engagement ring—ouch!

Before you start hyperventilating while looking at your modest savings, take a step back. There are a number of ways you can surprise that special someone with the ring of their dreams—without losing your shirt in the process:

  1. Jewelry store financing
  2. Credit cards
  3. Personal loans
  4. Unconventional avenues

To help you make the best engagement ring purchase decision, let’s take a closer look at each financing option.

1. Jewelry Store Financing

All major jewelry stores offer financing, with many promoting interest-free financing for 6 to 12 months. But these offers come with a catch: miss a payment or fail to pay off the balance in time, and you’ll pay a lot more.

Typically, if you make one late payment or fail to pay off the balance during the promotional period, that interest is charged retroactively from the date of purchase. That means an extra 6 to 12 months of interest will be added to the balance you owe.

Here’s a sample of what some major jewelers typically offer:

  • Jared The Galleria of Jewelry: Jared financing offers a plan that charges no interest for the first 12 months. But you are required to put down a 20% deposit and have a Jared credit card.
  • Kay Jewelers: Kay Jewelers offers promotional financing through the Kay Jewelers Credit Card. If qualified, you can get 12 months of special financing, but a down payment or minimum purchase may be required.
  • Shane Co.: Shane Co. financing gives you multiple choices. If you can pay the ring off within six months, you can avoid any interest. If you need more time to pay, they have four financing options available ranging from 9.99% to 12.99% APR.
  • Zales: If you have the company’s credit card, Zales payment options range from 6 to 36 months in length, and you can purchase a ring without a down payment. They charge no interest if the balance is paid in full within six months for a minimum purchase of $300, within 12 months for a minimum purchase of $1,000, or within 18 months for a minimum purchase of $5,000.

[This information may have changed from the date of publication. See each jeweler’s website for current rates and promotional offers.]

However, keep in mind that in-store financing could ding your credit if there are multiple inquiries on your credit report, so don’t apply for store credit until you know you’ve found the perfect ring.

2. Credit Cards

You could use your own credit card to buy your baby that sparkler. If you want to go this route, make sure you do it the smart way.

  • Go for zero interest: Before slapping this large purchase onto your current credit card, check out zero-interest promotional offers that let you open a new account or transfer your current balance. Read the fine print so you don’t get stuck with retroactive interest if you can’t pay off the balance during the introductory period.
  • Cash in on rewards: If a new, zero-interest promotion isn’t a possibility, make the most of this purchase by using a credit card with a generous rewards program. Cards that offer cash back are your best bet, but airline miles are another good option—especially if you’re planning an exotic honeymoon getaway.

Credit cards can be convenient, but they can also be expensive if you don’t use them wisely. Consider all the implications of charging this expense before making a purchase. If all you can afford is the minimum monthly payment, you could end up paying for the engagement ring for most of your marriage.

3. Personal Loans

This is likely the most expensive option. Using a personal loan to finance your engagement ring will add a big dose of interest to the overall cost. But for those who can’t qualify for a zero-interest option, it may be the only choice.

There are two types of personal loans: secured and unsecured. Here’s what you need to know about each one:

  • Unsecured personal loans: An unsecured loan doesn’t require any collateral but often comes with a high interest rate. They are usually approved more quickly than other lines of credit, so you won’t have to wait a week or longer to make your purchase. But beware of fraudulent companies and payday loans that promise quick cash for astronomical interest rates.
  • Secured personal loans: Many banks offer secured personal loans. Approval requires a form of collateral, which could be something like your savings or, if you own one, your home. Other secured loans may use your car for collateral. Because collateral is part of the deal, you can get a lower interest rate, but you risk losing your collateral if you can’t meet the repayment terms of the loan.

For those who can afford the monthly payments and have okay credit, a personal loan could end up being the better deal in the long run. If you can score a personal loan with interest under 10%, we recommend taking it over using a credit card. You’ll also want to check your credit to make sure you don’t have any unpleasant surprises that can derail your engagement ring plans.

4. Unconventional Avenues

No, we’re not suggesting a jewelry heist, but there are some other (legitimate) ways to purchase an engagement ring without going into major debt.

  • Downsize: We know your sweetie deserves the best, but you’re just starting out your lives together. Why not go for a simpler engagement ring now and upgrade it at your fifth or tenth wedding anniversary?
  • Go retro: Vintage rings are all the rage, and many of them are much less expensive than a brand-new ring. If there isn’t a family ring to pass on, take a look at what Etsy and eBay have to offer. This way you can score a unique ring with character that doesn’t cost a fortune.
  • Get a part-time gig: Take on a part-time job at a jewelry store and dive into that employee discount. You can also put all your earnings toward the ring.
  • Purchase the diamond separately: Don’t be dazzled by a pretty setting or fancy box. The diamond is what you’re really after. You can save big when you buy a loose diamond. Plus, this way you can design a custom setting just for your betrothed.

Getting engaged is a once-in-a-lifetime experience, and you want it to be special. But you don’t need to start out your married life awash in a sea of debt—especially if you plan to buy a home in the near future. Avoid short-sightedness when it comes to the engagement ring. Take stock of all your options, and avoid any potential financing fiascos. Check that your credit is in good standing before you set foot in a jewelry store. You can get a free credit report through Credit.com.

Image: Ingram Publishing

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  • Dona Collins

    Fantastic points. Even as a woman, I do not understand the need for couples to start their relationships in debt; and (as a woman, again), I don’t understand the demands some women place on their significant others when it comes to the emotional value they put on the size of a ring. Does the size or ultimate price of the engagement ring really matter?

    I’d much rather see smaller ring investments and smarter investments into the future. The money saved could go towards opening a couple’s first joint savings account; towards the wedding; towards the downpayment for a new home; and dozens of other more practical things.

    My first engagement ring? It was the tiniest anniversary band in the store, with tiny diamond chips. I still have it and wear it. It cost under $200 (no, I did not forget a zero). I picked it out myself and wear it proudly because I know the ring isn’t what matters in our relationship; and when it comes to money, we’ll have other, more important obstacles to overcome.

    • Gerri Detweiler

      Dona – Great story! I would be a nervous wreck if my ring cost a small fortune. I take it off without thinking and “lose” it at least once a month if not more.

      Thanks for your comments.

  • Jesse Schlaud

    I recently proposed to my girlfriend without buying a ring first. I have some money saved but it seemed silly to spend so much on a ring when I knew she woud rather have a nice wedding and honeymoon. She said yes, and afterwards we went ring shopping together. We looked a lot of places and couldn’t find much that she liked within our budget (a few thousand dollars). My mom suggested we try Sam’s club. I was skeptical, but while the selection wasn’t great the prices were easily half what they were at the jewellery stores. We ended up getting a white gold ring with a half carat main stone and 1 carat total diamonds for $699. Plus while we were there we picked up a rotisserie chicken for dinner, win/win. We took it to the local jeweller to get it resized and they said it was a really nice ring.

    My advice for men thinking about proposing, skip the jewellery stores and go big box. You’ll save a lot of money and, assuming she’d care in the first pace, she’ll never know the difference.

    • http://www.Credit.com Gerri

      Not all women would find it terribly romantic to go to Sam’s and pick up a ring with the chicken but I think there are plenty who would prefer a financially sensible spouse. :)

  • jamie

    so – read the terms and conditions of the financing agreement before you sign up? bit of a no brainer really.

    if your betrothed wont want anything less than an Elizabeth Taylor rock, then you might also want to revisit why you want to be with her.

    i asked my fiance to marry me without a ring – because i knew she’d want to get something unique to her. i bought a £10 placeholder ring the next day (which she still wears) and over the next 6 months we worked with a local jewellery designer to make her ‘proper’ ring. It cost £460 and my fiance wouldnt have anything else.

    money isnt everything.

    • http://www.Credit.com Gerri

      Sounds very sweet.

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  • Paul Chernoff

    Nothing new about this type of financing. Used it the first time we bought carpeting 20 years ago. Read the terms carefully and realized that if we didn’t pay it off in 1 year interest would be large. Paid it off in 2 months.

    My wife picked out her own engagement ring. $250. Everything to do with the wedding was paid in cash.

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  • pdq

    I’m female and a jeweler – I make the stuff. I’ve seen far too many guys either feel like they have to overspend or be snookered into overspending by their girlfriends (“Is that all I’m worth to you?” yeeeech).
    Do yourselves a favor: if you really feel you MUST have an engagement ring, SET YOUR BUDGET FIRST. Then go shopping. Don’t let them bump you up (the advice about avoiding certain carat weight thresholds & upgrading later is utterly sound).
    Remember diamonds aren’t rare; the prices are kept artificially high by the likes of DeBeers. If you need to impress someone with rarity, go for very high clarity and color saturated gems like ruby or emerald. Note: these, being truly rare, will cost you far more than a comparable diamond weight.

    My engagement ring? When my (now) husband proposed, he wanted to go buy a ring, but there was a problem with the heatpump at his house where we planned to live. I opted to get the heater replaced. A diamond, no matter the beauty, would do absolutely zero to keep me from freezing in January.

    • Gerri Detweiler

      I love it! Good advice.

      • pdq

        It’s a real shame a lot of guys leave this to a moment of inspiration. “I NEED THIS BECAUSE I’M PROPOSING TONIGHT!!!1!1!” happens way too much. Give her a bubblegum machine ring and then go shopping, because you’re sure not making rational informed decisions while you’re fantasizing about romance.

        As one of my co-workers sez (translated roughly from Moroccan Arabic), “No money, no honey!” lol

  • pdq

    A side note: Jared & Kay’s – as well as JB Robinson, Marks & Morgan, LeRoy’s and Belden Jewelers (as well as several others) are all owned by Sterling, the U.S. arm of Signet Group, Ltd., so you can expect credit inquiries there, too.
    Advice: a good solid independent jeweler. Ask around and TAKE YOUR TIME SHOPPING. This is something you only do once in your life (well, most of us anyway).

    • Gerri Detweiler

      Makes sense – the financing terms on a lot of these offers look the same.

  • Pingback: Are You a Valentine's Day Cheapskate or Spendthrift? | Credit.com News + Advice()

  • Pingback: Are You a Valentine’s Day Cheapskate or Spendthrift? | ComparePlastic()

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  • http://www.sabyls.com Charlie Weisel

    Here’s the way to get the best looking engagement ring for your money:

    1. Get a little education and buy the right grade of diamonds. Most people can’t see the difference between a G color diamond and a perfect D color. And they can’t see the difference between a slightly included clarity (SI1 or SI2) and a more expensive grade (VS or VVS clarity) without magnifying it. If you buy the higher grades, you’ll either have to pay more, or buy a smaller diamond.

    2. It’s no longer true that 90% of the cost is in the center stone, with most of today’s ring styles. Look at the total cost instead. For example, the halo designs with small diamonds make the center diamond seem larger, at a lower price per carat.

    3. Shop around. Many retail jewelers know they have to compete with online dealers, and will give you comparable prices with the benefits of personal service and a local jeweler to stand behind the product.

    Remember this: your diamonds will hold their value as long as you live, and you can pass them on to your loved ones. You’ll get many years of use and enjoyment from them, too. All that most couples will have to show for the money they spend on their wedding later is a photo album, a video and a wedding gown. That puts them in perspective, from a purely financial point of view. There’s absolutely nothing wrong with buying an expensive ring and having an inexpensive wedding if that’s what the two of you want to do. (And don’t worry – you don’t have to spend a lot of money on either one to have a great marriage.)

  • Pingback: Engaged? 5 Things to Do With Your Money Now | Credit.com News + Advice()

  • deedee

    Hello, i have recently purchased a watch for over 800 dollars, i have made all my payments on time and even a weak ahead of time. when i fist asked if would receive a credit score every month for my payments they said yes that it is all reported, but when i went in to pay my last payment they said that they do not report anything. Now, can i do something in regards to that return the watch, sue, i am not sure what to do since i am just starting my credit and i was lied to just to get me to purchase the watch.. thank you!!

  • Rob

    Dumb question but I have never financed a ring before. If I finance a ring, do I get the ring right away or do I have to pay it off first?

    • http://www.Credit.com/ Gerri Detweiler

      Actually it’s a good question! You will get it right away.

  • Bored With The Mundane

    in this day and age, if your girlfriend is still pressuring you to purchase a diamond engagement then it is time for you to say ‘bye-bye’ to her. diamonds are a complete waste of money, are mined on the backs of people who are paid just a few dollars each day and reveal the vanity and self-centeredness of your girlfriend. try this: ask your ‘fiancee’ if she would be alright without a diamond engagement ring. take it one step further and tell her you are going to take the $5000 and donate it to a charity you believe in. you will discover just how deep (or shallow) her love for you is.

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