Engagement Ring Loans & Financing

Engagement ring loans through banks, credit cards, or credit unions are some of the ways you can finance an engagement ring purchase however, if you have the means or the time to sock away some money in an engagement ring fund, do so.

It's always better to pay for any large purchase in cash, without financing, but for many of us that just isn't possible these days. So, if you do need to finance an engagement ring make sure you investigate all your options.

Remember though, your options and interest rates, etc. will vary depending on your personal circumstances, location, and credit history.

But, first things first... And we can't stress this enough!

Before you even look at getting financing, a loan, or even if you're paying in cash, find out the return and refund policy of the jeweler or retailer you plan on buying the ring from. Circumstances can change, she could say "No!" or any other number of things could happen. Being stuck with the expense of something you no longer need or want is not where any of us want to end up.

Now that we have that out of the way...

Engagement Ring Financing Options

The options available to most of us looking at engagement ring financing are:

• A standard credit card
• A jeweler or store credit card
• A bank, personal loan, or specific engagement ring loans.
• Social Financing (or peer to peer financing)

For financing of any kind, find out what the interest rates are, the penalties, and the conditions.

Based on these, put a repayment plan together so that you know what the final cost will be by the time you finish paying off the loan or credit card for each option. You don't want to end up paying 3X the actual cost of the ring.

Another thing worth finding out is to see whether the retailer that you are purchasing from offers any sort of layaway plan. This is completely different from an in-house credit line or card they may offer and are usually short term plans with no financing charges. You simply give them X amount of dollars over a pre-determined schedule and time frame. Once the ring is paid in full you then get to take it home.

Credit Card Financing for Engagement Rings

If you decide to go the credit card route, and since this is likely to be a fairly large purchase, consider getting a separate credit card just for the ring.

It will be easier to keep track of any finance charges and interest rates and you'll know exactly what the ring will cost you in the end. Most financial experts will tell you that credit unions offer the best rates on credit cards so they should be your first stop if you're going to use a financial institution's credit card.

The other option in credit cards is a jeweler's card. These are in-house credit cards from the jeweler/retailer themselves and will often dazzle you with no interest for 12 months, free financing etc.. and other wonderful enticements. These can be a better deal than bank credit cards, engagement rings loans, or other types of financing but you really only reap the benefit if you pay off the card before the end of the promotional period. After that you may have some hefty interest rates to deal with so read and understand all the fine print.

Engagement Ring Loans

If you don't trust yourself with credit cards then you need to look into your options for engagement ring loans.

You can take out a personal loan through a bank or credit union or find out if the store you are buying from offers financing other than credit cards. In many cases, in-store financing when available, will offer better interest rates but these are typically short term loans ranging from a few weeks to a few months.

As far as personal loans go, there are basically two types: unsecured loans and secured loans.

The difference between them is fairly simple. In a secured loan you offer something as collateral for the loan, if you default on payment, the lender has the right to take your collateral. An unsecured loan doesn't have collateral tied to it and as such, the terms and conditions will be much more rigid and the interest rates higher.

Engagement Ring Loans & Financing On The Web

Bless the world wide web and the genius minds behind some websites.

If traditional engagement ring financing options just don't work for you, or it's just too expensive, or not possible for any reason, you may want to try peer-to-peer or social financing. Basically, these are sites where people who need financial help go to apply for engagement rings loans or any other type of loan and are financed by their peers.

A borrower simply fills out an online application, posts their customized loan listing, and gets peer investors to fund their loan with lower interest rates than traditional financing. If you're interested in trying it out check out Zopa.com in the UK and Prosper.com in North America. We love this idea!

Engagement rings have sentimental value as well as being a major investment but they should never put you in financial ruin. The sentimental value and symbol of the ring is much more important than the financial one so in the end, always buy what you can afford whether with or without financing.

If you have your hearts set on a specific ring but just don't have the extra cash on hand, and if you've honestly looked at your finances and can repay your engagement ring loans (whether they be through credit cards or bank loans) in a relatively short period of time without accruing too much interest then go for it.

But always remember to make sure you look at the final cost of the ring and not the purchase price.