Buying an engagement ring at a jewelry store can be beneficial in many ways but what if you have bad credit? If you do not have the money for your engagement or wedding ring, an installment loan may be the only way to go.
However, these loans can have high-interest rates depending on your credit score. On the flip side, once you have your credit approval, opening new accounts can help your credit and even your credit score over the long run.
See Financing Options with a $5k Limit
You may get retailer offers on your favorite ring, especially around holidays. You can envision your soon-to-be life partner trying on different rings before the purchase. Jewelry stores frequently offer great financing options to their customers, and it can be an exciting time. However, you want to be prepared before you ever walk into the store.
Important Facts Before You Go Shopping
Before financing an engagement ring at the jewelry store, you must research thoroughly and understand the terms and conditions of their deals. You will want to do a credit check with the credit bureaus before making a large purchase. Knowing your credit score ahead of time will help you feel confident when applying for a jewelry store credit card.
- Get pre-qualified before you go shopping.
- Focusing only on engagement rings in your price range.
- Avoid going over budget. Remember, this can be an emotional purchase, and the bling can get you sidetracked.
- Only go to stores that offer rings in your price range.
Get Financing Information Here
Many will offer financing deals, and it is a good idea to know when the end of the promotional period is, what the minimum interest charge is, and the minimum monthly payments. An engagement ring purchase is a serious decision, and the financing offer may not be the best financial decision in the long run.
It’s easy to feel attracted by financing deals offered by popular jewelry stores like Kalyan Jewellers, Jared the Galleria of Jewelry, Shane Co., Kay Jewelers, and Zales. But these deals often come with various loan terms that you’re unlikely to go after. They also may require a down payment. Your minimum payment may be low, but you also may be paying higher than normal interest rates if you do not have good credit.
For instance, you can get a fantastic no-interest deal, but that works for a set range of repayment time. If you cannot pay the entire amount within that set deal period, you may end up with higher interest rates and spend as much as 50% more for the ring than its original price.
If you can afford to pay bills on time according to the terms & conditions, jewelry store financing is an excellent option for you.
Check Out: How To Build Your Credit Fast and For Free! Our Top 8 Tips
Credit Card
Financing an engagement ring using a credit card can be your second best option unless you have a high-interest credit card. If you choose credit card financing for the engagement ring, make sure you put it on a card that has a low APR (preferably 0%).
Without a 0% APR credit card, you might end up paying a lot more than the original cost of the engagement ring, and you may even face credit issues if you miss a payment or two.
You can apply to get a credit card with a 0% intro APR offer if you have good credit. For example, the Helzberg Diamonds Credit Card, the Iddeal Jewelry Credit Card, and the Zales Credit Card have about the same chance of getting approved for them because they all are store cards that require fair credit for approval. The easiest jewelry credit card will also have the highest interest rate.
Although, if that is not the case, poor credit is something you should not leave unattended. Refer to our mini guide if you want to build your credit score, as it offers actionable steps that work and can help repair your credit quickly!
Many different cards offer introductory APR offers like:
- Citi Diamond Preferred Card
- Discover it Cash Back
- Capital One Quicksilver Cash Rewards Credit Card
- Chase Freedom Unlimited
Among all of these, Chase Freedom Unlimited is the most valuable credit card that you can lay your hands on. Various benefits that Chase Freedom Unlimited offers are:
- 0% intro APR for 15 months (goes up to a normal of 14.99% to 23.74% after introductory offer period)
- 1.5% cashback on most purchases
- $200 bonus when you spend $500 in the first three months of getting the card
- 5% cashback on travel purchases and 3% on dining, including takeout and drugstores
- ZERO annual fee
Check Out: Ultimate Guide To Credit Repair For 2021
Personal Loans to Finance an Engagement Ring
Instead of getting stuck in a promotional deal that can be problematic if you do not abide by the terms, you can apply for a personal loan. A personal loan for an engagement ring will offer the cash that you need upfront when making the purchase, as well as an excellent repayment period.
Still, a personal loan must be your last option when financing an engagement ring. Your priority must be securing a 0% jewelry store financing deal or getting the ring on a low or 0% APR credit card. There are even 90 days same as cash finance plans that are a great option, as long as you can abide by the terms.
Credit Unions offer more flexible terms than large banks and are often friendlier to those with credit issues or in most cases, no credit history. They also offer lower interest rates than banks which will help with getting low monthly payments.
However, if you fail at qualifying for either of these payment options because of a bad credit score, derogatory marks on your credit reports, poor banking history, your best option may be a personal loan.
Although it is essential to look around for good deals with a lower interest rate (preferably under 10%). Another thing to keep in mind is the loan repayment period. The longer you take to finish off the loan amount, the higher interest you’ll end up paying!
Financing an engagement ring: FAQs
When you’re planning on buying an engagement ring, try not to get carried away. First, you must decide to buy a ring that you can afford. When you’re at the point of proposing, you’re also at a point where other significant financial hits like a wedding, family responsibilities, and maybe buying a house are on your way!
Here are some frequently asked questions you should check out:
- Should you finance an engagement ring?
- We suggest you save money and buy the engagement ring in cash. Trust me, you do not want to head into a married life that is financially stressful.
If you do not have any other options than engagement ring financing, you should be skeptical while searching for your options. Not all the options are the same, so ensure looking thoroughly and grab a deal that is worth it!
- Is $5000 good for an engagement ring?
Most millennials tend to spend an average of $3000 for an engagement ring. The national average cost of an engagement ring is $5500. In some states, people like to spend $1000-$2000 on their engagement rings.
There is no perfect cost of an engagement ring. An engagement is more about loving and starting something new together.
Instead of wondering how much you should spend on it, look more towards personal factors like your fiancé-to-be’s expectations, her style, and your financial situation.
- Should I take out a loan for an engagement ring?
The best way to finance an engagement ring is by putting it on a low or 0% APR credit card or getting a 0% jewelry financing deal. A personal loan should be your last option, given you’d have to deal with high interest rates on taking a loan.
Bottom Line
Before you get to the jewelry store and explore your engagement ring financing options, ask yourself—Can you afford to finance this costly ring? Is it really a good deal? How about finding one that is beautiful, and cost-efficient as well?
It is important to make sure you’re purchasing a ring that you can afford. Going for something that is over your limits and may keep you paying debt off for 10 years doesn’t sound like the right way to start your married life. High quality jewelry will last you a lifetime. But you do not want your jewelry purchase to cause you to be under financial stress. Whatever payment plan you choose, make sure it is one you can stick with so you can improve your credit.
You still have to pay for the wedding, honeymoon, and a new house, after all. You will need a strong credit history to make those special moments happen.
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