Best financing for engagement rings in 2018
loan for engagement ring

Compare loans for engagement rings

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Learn how to choose the right loan for buying an engagement ring.

The old adage holds that a wedding ring should cost three months salary. But how can you come up with that money? The cost of an average wedding ring is over $5,500, according to a 2013 study by TheKnot.com, while the XO Group Inc. Engagement & Jewelry Survey from 2011 found that 12% of buyers spent in excess of $8,000 for their engagement ring.

Picking the right ring while sticking to your budget can be difficult, especially if you haven’t saved up much in advance. If you are considering financing, it’s important to consider all of your options.

Some jewelry stores offer in-store financing. However, many of these offers require you to open a new retail credit card which can affect your debt-to-credit ratio and by extension your credit score. These offers can also come with a high interest rate once the promotional interest period ends.

Alternatively, you can consider getting a personal loan to buy an engagement ring. Here’s what you need to know about how those loans work.

Prosper Personal Loans

Prosper

You could borrow up to $40,000 for a variety of purposes, with rates starting from 6.95%.

  • Recommended Credit Score: 640 or higher
  • Minimum Loan Amount: $2,000
  • Maximum Loan Amount: $40,000
  • Loan Term: 3 or 5 years
  • Turnaround Time: 1-3 business days
  • Simple online application process
  • No prepayment penalties

    How does financing for an engagement ring work?

    You can take out a personal loan to finance an engagement ring. Loans through banks, credit unions or peer-to-peer lenders will be unsecured and your rate will largely depend on your credit score.

    The application time will depend on the lender you apply with, but can take from as little as one business day to a few weeks. You’ll need to make monthly repayments over the loan term, which differs between lenders.

    Personal loans to help you pay for that rock

    Rates last updated August 19th, 2018

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    Unfortunately, none of the personal loan providers offer loans for that credit score. If you are in urgent need of a small loan, you might want to consider a short term loan.
    Name Product Product Description Min. Credit Score Max. Loan Amount APR
    Credible Personal Loans
    Get personalized rates in minutes and then choose a loan offer from several top online lenders.
    Good to excellent credit
    $50,000
    4.99%–36% (fixed)
    LendingClub Personal Loan
    A peer-to-peer lender offering fair rates based on your credit score.
    660
    $40,000
    6.16%–35.89% (fixed)
    SoFi Personal Loan Fixed Rate (with Autopay)
    No fees. Multiple member perks such as community events and career coaching.
    680
    $100,000
    7.075%–15.365% (fixed)
    Even Financial Personal Loans
    Get connected to competitive loan offers instantly from top online consumer lenders.
    580
    $100,000
    4.99%–35.99% (fixed)
    NetCredit Personal Loan
    Check eligibility in minutes and get a personalized quote without affecting your credit score.
    550
    $10,000
    34%–155% (Varies by state) (fixed)
    Best Egg Personal Loans
    A prime lender with multiple repayment methods.
    640 FICO®
    $35,000
    5.99%–29.99% (fixed)
    Monevo Personal Loans
    Quickly compare multiple online lenders with competitive rates depending on your credit score.
    580
    $100,000
    3.09%–35.99% (fixed)
    FreedomPlus Personal Loans
    Consolidate debt and more with these low-interest loans. Cosigners welcome.
    640
    $35,000
    4.99%–29.99% (fixed)
    OppLoans Installment Loans
    Installment loans with competitive rates from a top-rated direct lender.
    Bad credit accepted
    $5,000
    99%–199% (fixed)
    OneMain Financial Personal and Auto Loans
    An established online and in-store lender with quick turnaround times. Poor credit is OK.
    Varies
    $30,000
    16.05%–35.99%* (fixed)

    Compare up to 4 providers

    What are my options to finance an engagement ring?

    Sometimes your heart moves faster than your savings. If you don’t have cash on hand to pay for the ring of your partner’s dreams, options for smart borrowing include:

    • Jewelry store financing. Many big-name retailers offer in-house plans, with some extending no-interest financing. Just be wary of high interest once those promos revert and stiff penalties if you miss a payment.
    • Personal loan. A longer-term loan allows you to pay off that big sparkler in smaller fixed payments for up to five years. You won’t find 0% APR, but with good credit, you could see approval for 10% or less.
    • Credit card. If you can qualify for a card with a low- or no-interest period, you might find that you’re able to pay off your purchase before any intro APR expires.
    • Friends and family. Deep down, we’re all romantics. Your loved ones may jump at the chance to bring more family into the fold. By asking for the most personal of loans, you could land flexible terms and rates as low as… well, no percent.

    6 features to consider when comparing engagement ring loans

    • Interest rate. The interest rate you have to pay will significantly impact the total cost of the loan, so it’s important to compare your options and choose a competitive, low interest loan is important. Factors that affect interest rate include your creditworthiness, the amount you wish to borrow and the desired loan term, as well as the lender you select. An easy way to compare the cost of engagement ring loans is to look at the annual percentage rates (APR) for the loan, which includes interest as well as all applicable fees and charges.
    • 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 fees, loan disbursement fees, late payment fees and prepayment penalties.
    • Loan amount. The amount you can borrow differs between lenders. Generally, maximum loan amounts are between $25,000 and $40,000, but some lenders offer unsecured loans up to $100,000.
    • 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. Ideally, you should repay the loan as soon as possible.
    • Eligibility criteria. Some providers of engagement ring loans require applicants to have good creditworthiness. Some others provide loans to people with less-than-perfect credit history, provided they have steady jobs.
    • Unsecured. Personal loans will be unsecured, so you won’t be risking your ring should you have trouble repaying your loan. However, there are some lenders available that offer specialized loans, which will use your engagement loan as collateral. These loans are largely targeted towards bad credit borrowers.

    engagement ring finance

    How much should I spend on an engagement ring?

    Old school wisdom says you should spend two month’s 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 preferences and your financial situation. Your partner might have a specific style in mind and would prefer a less-expensive version of that than an extremely expensive ring in the wrong cut. Try to suss out their preferences before making a big purchase.

    Once you know what 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: Most Americans expect to spend between $1,000 and $5,000 according to a recent survey by EBates, though the average price of an engagement has risen to $5,000 in recent years.

    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 liabilities.

    How much do wedding rings cost?

    If your partner says yes, you aren’t done with ring shopping yet: You still need to get wedding bands. The average wedding ring for women costs around $1,500 and $550 for men. The cost largely depends on what type of metal you go with: White gold is generally less expensive than platinum.Some women also like to have their wedding band fitted with diamonds or to match their engagement rings, which can easily make prices jump. Make sure to factor in these costs when considering wedding expenses.
    A personal loan could take your wedding from “meh” to memorable

    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 brick-and-mortar jewelers — including Zales, Kay Jewelers and Tiffany’s — offer so many 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 get their specific return policy.

    Now if you took out a loan to purchase the ring, things 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 prepayment fees. You can pay off the loan early, but you’ll still have to pay off any interest that’s accrued or fees they charge.

    What are the benefits and drawbacks of an engagement ring loan?

    Pros

    • Get the ring you want. If you don’t have money to pay for the engagement ring you wish to buy, you can think about getting a loan. This way, you pay for the ring when you want, and repay the money you owe in installments.
    • 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 can be 12 to 24 months. If you repay the entire amount before the promotional period expires, you won’t pay any interest.

    Cons

    • The burden of debt. If you borrow more than your means, repaying the loan can become a challenge. Not making timely repayments will have an adverse effect on your credit score.

    Valentine's Day proposals

    If there were ever a day made for showing your boyfriend or girlfriend just how much you love them, Valentine’s Day would be it. And what better way to show your devotion to your partner than by buying an engagement ring and getting down on one knee and asking for their hand in marriage? That’s why February 14th is one of the most popular days for couples to get engaged. And millennials seems to agree that it’s the perfect day for proposals.

    According to a 2017 survey by James Allen, an online diamond and bridal jewelry retailer, 43% of millennials said Valentine’s Day was their top day to propose or be proposed to. What with the endless supply of long-stemmed red roses, chocolate candies and sales on diamonds, it’s no wonder that this love-filled holiday sees millions of couples getting engaged each year.

    Fun fact: The holiday season about more than just presents and eggnog: The most popular time of year to pop the question is between Thanksgiving and Valentine’s Day. More than half of engagements take place in December. The most popular day of the year to get engaged? That’s right: It’s Christmas Day.

    Common questions about financing an engagement ring

    Image: Shutterstock
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    US Personal Loans Offers

    Important Information*
    Even Financial Personal Loans

    Get connected to competitive loan offers instantly from top online consumer lenders.

    Prosper Personal Loans

    Borrow only what you need for debt consolidation, home improvements and more — with APRs based on overall creditworthiness.

    LendingClub Personal Loan

    A peer-to-peer lender offering fair rates based on your credit score.

    SoFi Personal Loan Fixed Rate (with Autopay)

    No fees. Multiple member perks such as community events and career coaching.

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