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Engagement ring financing in Canada

Looking to take that next step but need financing? Learn about your options here.

Picking the perfect engagement ring while sticking to your budget can be difficult. If you don’t have a ton of savings, you may be considering financing. There are several financing options including personal loans, in-store financing, credit cards and more. Our guide covers your options for engagement ring financing in Canada options are, as well as features to consider when choosing the right type of financing for your needs.

How to finance an engagement ring

Whether you opt for a jewelry store financing plan, a personal loan or another finance option, all engagement ring financing tends to work the same way: Once you’ve settled on an engagement ring, you’ll take out a loan to pay for some or all of the cost of the ring. You can then do monthly payments on the engagement ring until it’s paid off. Depending on the type of financing you get, you may also have to pay interest on the loan.

Depending on the lender, it can take as little as a few minutes or up to several business days to get your application for an engagement ring loan approved. Your loan contract will likely require that you make monthly repayments, but you may be able to choose a bi-weekly or even weekly payment schedule.

Options for engagement ring financing in Canada

If you don’t have all of the cash on hand to pay for the ring of your partner’s dreams, these are some engagement ring financing options:

1. Jewelry store financing

Many jewelry stores in Canada offer in-house financing, either through a lending partner or an in-store credit card. One benefit of in-store jewelry financing is that it’s one of the simplest methods for financing an engagement ring. A sales associate helps you apply in the store, and you find out almost immediately how much you’re approved for.

Perhaps the biggest advantage to going with jewelry store financing though is that it often comes with a long interest-free period, typically ranging from 6-12 months, although you may find some offers up to 24 months or more. The important thing to keep in mind about these offers is that if you don’t fully pay back the loan by the time the interest-free period is up, you might be charged a very high interest rate – often between 30% and 40%.

Jewelry store financing can be relatively easy to qualify for, but the amount of financing and loan terms you’ll be approved for will depend on factors like your credit score, personal financial situation and how much you plan to spend.

Here is a list of popular jewelry stores in Canada offering engagement ring financing:

  • Peoples
  • Spence Diamonds
  • Michael Hill
  • James Allen

2. Personal loan

A personal loan is another way to finance an engagement ring in Canada. It usually comes with a term of one to seven years. You won’t find 0% annual percentage interest rate, but with a good credit ratting, you could see interest rates of less than 11%.

Loans through banks, credit unions or peer-to-peer lenders will typically be unsecured and your rate will largely depend on your credit score and your ability to repay your loan. Other less traditional personal loan lenders may offer secured loans, which means you will need to use collateral in order to secure the loan. You can compare options for personal loans to finance an engagement ring in the table below.

Compare personal loans to help you pay for an engagement ring

1 - 8 of 8
Name Product Ratings APR Range Loan Amount Loan Term Broker Compliance Requirements
Spring Financial Personal Loan
Finder Score:
★★★★★
Customer Survey:
★★★★★
10.8% - 46.99%
$500 - $35,000
6 - 60 months
Requirements: min. income $1,800/month, 3+ months employed, min. credit score 500
Loans Canada Personal Loan
Finder Score:
★★★★★
Customer Survey:
★★★★★
6.99% - 46.96%
$300 - $50,000
3 - 60 months
Loans Canada is a loan search platform with access to multiple lenders. Applicants will be matched with a suitable lender based on credit history and borrowing requirements.
Requirements: min. credit score 300
LoanConnect Personal Loan
Finder Score:
★★★★★
Customer Survey:
★★★★★
8.99% - 46.96%
$500 - $50,000
3 - 120 months
LoanConnect is a loan search platform with access to multiple lenders. Applicants will be matched with a suitable lender based on credit history and borrowing requirements.
Requirements: min. credit score 300
easyfinancial Personal Loan
Finder Score:
★★★★★
Customer Survey:
★★★★★
9.99% - 46.96%
$500 - $100,000
9 - 120 months
Requirements: min. income $1,200/month
AimFinance Personal Loan
Finder Score:
★★★★★
46.00%
$1,000 - $5,000
9 - 24 months
Requirements: min. credit score 580
Mogo Personal Loan
Finder Score:
★★★★★
Customer Survey:
★★★★★
9.90% - 46.96%
$500 - $35,000
6 - 60 months
Requirements: min. income $35,000/year, min. credit score 600
SkyCap Financial Personal Loan
Finder Score:
★★★★★
Customer Survey:
★★★★★
12.99% - 39.99%
$500 - $10,000
9 - 36 months
Requirements: min. income $1,666.67/month, full time employment/pension, min. credit score 575, no bankruptcy
goPeer Personal Loan
Finder Score:
★★★★★
8.99% - 34.99%
$1,000 - $35,000
36 - 60 months
Requirements: recommended income $35,000/year, no payday loan debt, min. credit score 600, min. 5-year credit history. (Avg. approved rate of 15.80%)
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3. Credit card

Another good way to finance an engagement ring is by paying for it with a low interest credit card. Low interest credit cards typically come with standard interest rates between 9% and 12%. The perk of using a low interest credit card is that as long as you make the minimum payment, you’re not fixed to a set repayment schedule. Like with any lending product, the credit card limit you’ll be approved for will depend on your credit rating and personal finances.

It’s important to be cautious paying for an engagement ring with a standard rate credit card, as those usually come with interest rates around 20%. So unless you plan to pay off the ring quickly, you could end up paying a lot extra in interest.

4. Layaway

Some jewelry stores offer layaway plans. With a layaway plan, you put down a deposit (e.g. 20%) to essentially reserve the ring. The ring stays with the store until you pay it off in full. You’ll make regular payments at 0% interest within a certain timeframe, usually within 6-12 months. If you don’t pay off the ring by the deadline, the store keeps the ring and the deposit.

6 things to consider when comparing engagement ring financing in Canada

You should compare the following features when trying to find the right loan for your needs:

  • Interest rate. The interest rate you pay will significantly impact the total cost of the loan, so it’s important to compare your engagement ring financing options and choose a competitive, low interest loan. Factors that affect the interest rate you’re offered include your credit score, your ability to make your repayments, the amount you wish to borrow, the desired loan term and the lender you select.
  • Fees. Fees add to the cost of a loan. Go through the loan contract to find out how much you might have to pay in application and/or administration fees, late repayment fees and early repayment penalties.
  • Loan amount. The amount you can borrow differs between lenders. Generally, maximum personal loan amounts are between $25,000 and $35,000, but some lenders offer unsecured loans up to $100,000. The maximum amount for in-store jewelry financing will vary based on what you can qualify for and what you want to purchase.
  • Loan term. Getting a longer loan term can be tempting as the monthly payments will be lower. However, the longer you take to repay your engagement ring loan, the more you’ll pay in interest, which ultimately increases the cost of your loan. Ideally, you should repay the loan as soon as you can.
  • Eligibility criteria. Some providers of engagement ring financing require applicants to have good credit scores. Others provide loans to people with fair or bad credit, provided they have a steady source of income. Learn more about the best bad credit. loans.
  • Unsecured or secured. Personal loans are usually either secured or unsecured. Taking out a secured loan means you will need to put up collateral. An unsecured loan, on the other hand, doesn’t require you to put up any collateral, however, you’ll usually be offered a less competitive interest rate.

engagement ring finance

How much should I spend on an engagement ring?

The average cost of an engagement ring in Canada is around $3,5000. Old-school wisdom says you should spend two or three months’ salary on an engagement ring, but that’s no longer a hard-and-fast rule.

There are two things you need to consider when figuring out your engagement ring budget:

  • Your partner’s ring preferences
  • Your financial situation

Once you know what ring style you’re looking for, then you’re ready to start thinking about financing. Get a sense of the price range of that style by shopping around. It might be more than you expect, keeping in mind the average amount Canadians spend on a ring.

Before you buy an expensive ring on credit, establish how long you’ll take to repay the debt. Account for other expenses that you’ll encounter going forward, including your eventual wedding plans. Review how a large purchase would affect your existing debts.

What happens if they say no?

No one goes into a marriage proposal thinking that their partner is going to say “no”, but unfortunately that doesn’t mean it doesn’t happen. So, what should you do if you took out a loan to pay for the ring?

First things first, you should try to return the engagement ring to the retailer you purchased it from. Most retailers offer a specific amount of days, usually at least 30, for you to return an item for a complete refund. You’ll need to reach out to whatever store or online retailer you bought your engagement ring from to understand their specific return policy.

If you financed the ring, things might get a little trickier. While many loan providers allow you to get out of a loan if the funds have not yet been disbursed, it’s usually not easy to get out of a loan if you’ve already received and used the money. In this case, look to see if your lender has early repayment fees. You can pay off the loan early, but you’ll still likely have to pay off any interest that’s accrued or fees they charge.

Representative example: Tim finances an engagement ring to propose to Lucy

Tim needs to buy an engagement ring as he is planning on proposing to his girlfriend Lucy. He has picked out the perfect ring – but it costs a whopping $4,500.00. He has $2,000.00 available to spend on a ring, so he’ll need to find a loan to cover the remaining $2,500.00.

He heads online to compare personal loan lenders, and also contacts his local bank to see what they can offer him. But unfortunately, due to his bad credit rating, his bank won’t offer him engagement ring financing. He settles for an online lender that caters to those with bad credit – and has the $2,500.00 funds in his account by the next business day. Although his interest rate is higher than he would have liked, he realizes he can use this opportunity to make timely payments and improve his credit score.

Cost of ring$4,500.00
Loan typePersonal loan
Loan amount$2,500.00
Interest rate15.00%
Loan term1 year
Additional feesOrigination fee of 3% ($75.00)
Monthly payment$225.65
Total loan cost$2,782.75

*The information in this example, including rates, fees and terms, is provided as a representative transaction. The actual cost of the product may vary depending on the retailer, the product specs and other factors.

Pros and cons of engagement ring financing

  • Get the ring you want. If you don’t have enough money saved up in cash to pay for the engagement ring you wish to buy, financing could be the way to go. This way, you pay for the ring in installments over a specified time period.
  • Quick and easy process. Getting a typical engagement ring loan is quick and easy. In some cases, you can get your hands on the approved funds by the following business day.
  • Interest-free offers. If you choose to go the in-store financing way, you can benefit from interest-free offers. In this case, you don’t have to pay any interest towards the purchase for a predetermined time period, which is usually anywhere from 6 to 24 months. If you repay the entire amount before the promotional period expires, you won’t pay any interest at all.
  • The burden of debt. If you borrow more than you can afford, repaying the loan can become a challenge and it’s possible you’ll be thrown into a cycle of debt.
  • Late repayments. Not making your repayments on time will likely have a negative effect on your credit score if the lender reports you to one of the credit bureaus. Furthermore, your loan will be more expensive since you’ll usually accrue late repayment fees and more interest.

Frequently asked questions about engagement ring financing in Canada

Image: Shutterstock

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