Ah, to be young and in love. When you find that perfect match and gather the courage to pop the question, it feels like you’ve got the world on a string. Then you go shopping for an engagement ring and discover the true price of love.
These days, you can expect to fork over more than $6,000 for an engagement ring—ouch!
Before you start hyperventilating while looking at your modest savings, take a step back. There are a number of ways you can surprise that special someone with the ring of their dreams—without losing your shirt in the process:
To help you make the best engagement ring purchase decision, let’s take a closer look at each financing option.
All major jewelry stores offer financing, with many promoting interest-free financing for 6 to 12 months. But these offers come with a catch: miss a payment or fail to pay off the balance in time, and you’ll pay a lot more.
Typically, if you make one late payment or fail to pay off the balance during the promotional period, that interest is charged retroactively from the date of purchase. That means an extra 6 to 12 months of interest will be added to the balance you owe.
Here’s a sample of what some major jewelers typically offer:
[This information may have changed from the date of publication. See each jeweler’s website for current rates and promotional offers.]
However, keep in mind that in-store financing could ding your credit if there are multiple inquiries on your credit report, so don’t apply for store credit until you know you’ve found the perfect ring.
You could use your own credit card to buy your baby that sparkler. If you want to go this route, make sure you do it the smart way.
Credit cards can be convenient, but they can also be expensive if you don’t use them wisely. Consider all the implications of charging this expense before making a purchase. If all you can afford is the minimum monthly payment, you could end up paying for the engagement ring for most of your marriage.
This is likely the most expensive option. Using a personal loan to finance your engagement ring will add a big dose of interest to the overall cost. But for those who can’t qualify for a zero-interest option, it may be the only choice.
There are two types of personal loans: secured and unsecured. Here’s what you need to know about each one:
For those who can afford the monthly payments and have okay credit, a personal loan could end up being the better deal in the long run. If you can score a personal loan with interest under 10%, we recommend taking it over using a credit card. You’ll also want to check your credit to make sure you don’t have any unpleasant surprises that can derail your engagement ring plans.
No, we’re not suggesting a jewelry heist, but there are some other (legitimate) ways to purchase an engagement ring without going into major debt.
Getting engaged is a once-in-a-lifetime experience, and you want it to be special. But you don’t need to start out your married life awash in a sea of debt—especially if you plan to buy a home in the near future. Avoid short-sightedness when it comes to the engagement ring. Take stock of all your options, and avoid any potential financing fiascos. Check that your credit is in good standing before you set foot in a jewelry store. You can get a free credit report through Credit.com.
Image: Ingram Publishing