The Best Ways to Finance an Engagement Ring

What to do if cash is not an option for your brand-new sparkler.

A young couple smiles into the selfie-camera and show off the engagement ring they financed.
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Dean Mitchell / Getty Images 

Buying an engagement is no small purchase. In fact, it may be one of the biggest purchases you’ve made thus far in your life. A recent study from TD Bank found that while the average couple spent $2,016 on an engagement ring, 17% spent between $2,500-$5,000, and 7% spent $10,000 or more. This means you may be considering financing an engagement ring.

First and foremost, paying cash is always the best option when it comes to major purchases like an engagement ring. Paying cash will save you money on interest, help you avoid late payment fees or penalties, and keep you from buying a ring that’s out of your budget.

But if paying cash for your engagement ring isn’t an option, you may be looking to finance that brand-new sparkler instead. We explore the best ways to finance an engagement ring, from jewelry store financing options to a personal loan, even paying via credit card.

Jewelry Store Financing

Purchasing an engagement ring at a jewelry store has its perks—your soon-to-be fiance can try on different rings and settings before you purchase to find the perfect fit, your timing may coincide with a great sale, and they may offer you a great financing option.

But before financing an engagement ring through your jewelry store, do your research. You’ll want to educate yourself on a few things:

  • Any promotional deals: You will likely be offered a low promotional interest rate. This can potentially save you a lot of money, but be sure that you can afford to pay off the ring during that time frame.
  • Regular interest rate: Check the regular interest rate after the promotional time period runs out. Make sure you can afford the payment at the regular APR in the off chance you don’t pay it off during the promotional period.
  • Hidden fees or charges: With any big purchase, it’s smart to read the fine print and educate yourself on any hidden fees or charges that are included with financing options.

Watch out for “deferred interest” credit offers. Under these plans, if you fail to pay off the entire balance in the agreed upon time period (12 months, for example), you will be charged all of the interest you weren’t charged during the grace period. You will also be expected to keep up with minimum monthly payments during the grace period. If you miss any payments (or are 60 or days late on a payment), the grace period will end, and you will be charged for any interest deferred.

Credit Card

Another option to finance an engagement ring is to put it on a credit card. But this approach takes some planning. First, you’ll want to put the ring on a card with a very low—ideally 0%—APR. You’ll also want that low APR to match up with the time frame in which you plan to pay off the ring, so you won’t get slapped with a high APR once the promotional period runs out.

To qualify for a low- or zero-APR card, you’ll need to have great credit. If that isn’t the case, then you may need to take some time to build up your credit score first. While you may be ansty to get down on one knee and propose, taking your time and financing your ring the right way will save you big.

Personal Loan

When financing an engagement ring, taking out a personal loan should be your last resort. Ideally, you’ll want to secure a 0% financing deal with the jewelry store or put the ring on a low or 0% APR credit card and pay it off before the promotional period expires. If you don’t qualify for either of those options, whether due to a poor credit score, poor financial history, or some other reason, a personal loan may be your best bet.

A few tips to consider: Shop around for a personal loan with a lower interest rate—under 10% is a good benchmark. Whatever rate you ultimately find, ensure that it’s lower than the average APR on a credit card, which is around 16%. Also, while the average personal loan term is anywhere from 12 to 60 months, it’s wise to make the term as short as possible, in order to save money on interest.

One last thing to keep in mind when financing an engagement ring: Be sure you’re purchasing a ring you can afford. Overextending yourself and financing a ring that you’ll be paying for 10 years down the road isn’t the most financially sound way to start off a new marriage.

You still have the wedding and honeymoon to pay for, after all.