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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.
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.
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 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
There are a number of ways to ensure you’re getting the best deal when financing an engagement ring. Tips include:
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.
This type of savings account can save you from a lot of financial stress and anxiety.
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