Loans for an engagement ring

Can’t wait to pop the question, but worried about how you’ll afford a ring? This guide looks at the best ways to finance an engagement ring purchase.

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Engagement rings can cost hundreds, if not thousands of pounds, so if you’re looking to spread the cost of this expensive purchase, we take a look at some of the options available to you.

Can you get a loan for an engagement ring?

Lenders don’t offer specific financial products for engagement ring purchases (there’s no such product as an “engagement ring loan”), but there are several different ways of borrowing that could fit the bill.

One option is to take out a personal loan which will enable you to borrow a fixed amount of money and pay it back with interest over a set time. Alternatively, you could consider using a 0% credit card, in-store finance, an overdraft, or even borrowing from friends or family.

How can you finance an engagement ring purchase?

As there are a number of different options available to you, it is worth weighing up the pros and cons of all of them to help you come to the right decision.

Personal loan

Personal loans typically let you borrow between £1,000 and £15,000, with some lenders offering loans of up to £25,000. You then repay this amount in monthly instalments with interest charged on top over a term of between one and seven years.

Pros
  • Monthly repayments are fixed, making it easier to budget. You’ll know exactly when you’ll have paid off the loan.
  • Interest rates can be very low if you have a high credit score.
  • You can usually borrow a larger amount compared to a credit card or overdraft.
  • Making your repayments on time and in full will benefit your credit score.
Cons
  • Interest rates are generally higher for smaller borrowing amounts, so personal loans may only be suitable if you’re buying a particularly expensive ring.
  • You’ll need a good credit score to get accepted for the best rates.
  • Payments are not flexible so if for some reason you want to pay more or less one month, it’s not as easy as it would be with a credit card.

Credit card

Paying for an engagement ring with a credit card that offers 0% on purchases for a set number of months can work out to be the most cost-effective option (potentially free, in fact). You simply buy the ring and then pay for it over a series of monthly instalments. Providing you pay off the debt before the 0% deal ends, you won’t pay any interest.

Pros
  • 0% interest credit cards can help you spread the cost of your purchase cheaply.
  • Monthly payments are flexible so you can choose how much to pay off each month.
  • Some credit cards also allow you to earn cashback or rewards points on your purchases.
  • Thanks to Section 75 of the Consumer Credit Act, purchases between £100 and £30,000 on a credit card are protected in the event something goes wrong.
  • Making your repayments on time and in full will benefit your credit score.
Cons
  • Credit limits are personalised and may not stretch far enough to purchase your ideal ring.
  • You’ll need a good credit score to qualify for the most competitive credit cards.
  • If you have a 0% purchase deal, you’ll need to ensure you clear your balance before the interest-free deal ends.
  • If you miss a payment you risk losing your 0% deal and damaging your credit score.

Overdraft

If you have an overdraft on your bank account, you could also consider using this to cover the cost of your engagement ring purchase, particularly if it offers an interest-free period or low rate.

Pros
  • Payments are flexible and there is no set time by which you need to have paid off your debt.
  • Some bank accounts offer interest-free overdrafts.
  • Overdrafts can be quick to arrange.
  • Using an overdraft sensibly and paying it off can benefit your credit score.
Cons
  • Most overdrafts charge high rates of interest, and rates can be variable.
  • Your overdraft limit may not be sufficient to cover the cost of the ring.
  • Your bank has the right to ask for repayment of your overdraft at any time.
  • With no set repayment schedule, your debt could drag on indefinitely, pushing up the overall cost of borrowing.

In-store finance

Many jewellers offer you the ability to pay for your engagement ring over an extended period of time, sometimes with a 0% interest period. You can then spread the cost of the ring over several payments.

Pros
  • Payments may be interest-free for a set time.
  • You’ll usually only need to put down a small initial deposit of around 10%.
Cons
  • Most finance deals have a minimum spend.
  • Typically the longer your repayment period, the higher the rate of interest charged.
  • Penalty fees for missed payments can be high.

Guarantor loan

If you’ve got poor credit, a guarantor loan offers the opportunity to borrow with the help of a guarantor. This could be a friend or family member who guarantees to meet your payments if you’re unable to.

Pros
  • Can give you access to credit if you’re struggling to borrow money elsewhere due to your credit score.
  • If you repay your loan on time, your credit score can improve.
  • You may be able to borrow more money compared to standard loans.
  • Making your repayments on time and in full will benefit your credit score.
Cons
  • Interest rates are much higher than standard personal loans.
  • Your relationship with your guarantor could be at risk if you can’t keep up with your repayments.
  • Guarantor loans take longer to arrange.

Buy now, pay later services

Buy now, pay later (BNPL) services such as Klarna, Clearpay and LayBuy enable you to shop online (or in-store in some cases) and buy now, but pay for your goods later. Usually payments are split into 3 or 4 manageable amounts and most services offer 0% interest.

Pros
  • Enables you to spread the cost of your purchase into more manageable chunks.
  • Monthly payments are usually interest-free.
  • It’s quick and convenient.
Cons
  • Relatively short repayment periods – typically three months at most.
  • If you’re late making a payment, interest and fees charged can be high.
  • If you fail to pay on time or miss three monthly repayments, your credit score could go down.
  • Can encourage you to spend more than you can afford.

Finally, you could consider a short term loan. These don’t have the best rep., but lenders in the space have had to clean up their act in recent years. Although they are fast and tend to offer good early repayment terms, they remain an extremely expensive way to borrow.

Borrowing from fiends or family

You may also be able to borrow money from a friend or family member. This can allow you to borrow the exact amount you need and can offer a more flexible repayment schedule.

Pros
  • Payments can be more flexible.
  • Interest rates are typically lower compared to other finance options.
  • Repayment periods may be longer compared to other forms of credit.
Cons
  • Your relationship could be ruined if you are unable to repay the amount borrowed.
  • There’s limited legal protection if something goes wrong.

What’s the best way to finance an engagement ring purchase?

This really depends on your personal circumstances. Ideally you want to look for the cheapest option that you qualify for.

Using a 0% purchase credit card is generally a good option if you can get accepted. You’ll be able to spread the cost of your purchase over several months and providing you clear your balance before the 0% deal ends, you won’t pay any interest.

Can I get engagement ring finance with bad credit?

Yes you can, although your options will be more limited. You may also have to accept a higher rate of interest and lower credit limits.

Before applying for any form of finance, it’s sensible to take steps to improve your credit score such as paying your bills on time, checking you’re registered on the electoral roll, and correcting any mistakes on your credit report.

It’s also worth using an eligibility checker wherever possible. Many credit card and loan providers offer eligibility checkers which only use a “soft search”. This means the search won’t leave a mark on your credit file and won’t affect your credit score. Eligibility checkers will give you a clearer idea of which credit cards or loans you’re most likely to get accepted for so you can make a full application more confidently.

In comparison, if you make an application without using an eligibility checker, lenders will run a “hard search” and a mark will be left on your credit file for other lenders to see. Too many searches in a short space of time can suggest you’re desperate for credit and lenders may be more reluctant to let you borrow.

Can I get engagement ring finance with no credit check?

Most providers will run a credit check before you apply for a credit card or loan, or even if you apply for a current account with an overdraft.

However, some jewellers offer in-store credit with no background credit checks and if you use a BNPL service, the lender will usually only run a “soft search” so other lenders won’t be able to see you’ve applied for that credit.

Practical tips for financing an engagement ring

There are a number of ways to ensure you’re getting the best deal when financing an engagement ring. Tips include:

  • Haggle. There is no harm in negotiating a discount or better deal with the retailer on your chosen ring – after all, if you don’t ask, you don’t get.
  • Speak to family. If there’s a family heirloom lying around, you may be able to use this instead of paying for a brand new ring!
  • Pay for what you can upfront. The more you can pay upfront, the less you’ll need to borrow on finance.
  • Get to know your credit score. Use a free online service to check your credit score so that you know how likely you are to get accepted for credit.
  • Improve your credit score. If your credit score is low, take steps to improve it such as paying bills on time and checking you’re on the electoral roll. This will give you a greater chance of getting accepted for a more competitive finance deal.
  • Use an eligibility checker. This will give you an indication of which credit cards or loans you’re most likely to get accepted for.
  • Try to choose short-term finance. Whether you’re taking out a loan or using in-store finance, it’s usually better to opt for a shorter term if you can. Your monthly repayments will be higher but you’ll repay your debt more quickly and pay less interest.
  • Clear your debt before any 0% deal ends. If you’re using a 0% purchase credit card or 0% finance, make sure you pay off the amount owed in full before the 0% deal ends so that you don’t get hit with interest and fees.

Should you take out a loan for an engagement ring?

Ultimately, the gesture of proposing should be what matters, not the value of the ring. When buying an engagement ring, it’s best to only ever spend what you can afford. This means resisting the temptation to take out a huge loan to finance your ring purchase when you know you’ll struggle to repay it. This can lead to serious debt problems that simply won’t be worth it.

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