The Crazy World of Engagement Ring Financing

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:

Jewelry store financing
Credit cards
Personal loans
Unconventional avenues

To help you make the best engagement ring purchase decision, let’s take a closer look at each financing option.

1. Jewelry Store Financing

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:

Jared The Galleria of Jewelry: Jared financing offers a plan that charges no interest for the first 12 months. But you are required to put down a 20% deposit and have a Jared credit card.
Kay Jewelers: Kay Jewelers offers promotional financing through the Kay Jewelers Credit Card. If qualified, you can get 12 months of special financing, but a down payment or minimum purchase may be required.
Shane Co.: Shane Co. financing gives you multiple choices. If you can pay the ring off within six months, you can avoid any interest. If you need more time to pay, they have four financing options available ranging from 9.99% to 12.99% APR.
Zales: If you have the company’s credit card, Zales payment options range from 6 to 36 months in length, and you can purchase a ring without a down payment. They charge no interest if the balance is paid in full within six months for a minimum purchase of $300, within 12 months for a minimum purchase of $1,000, or within 18 months for a minimum purchase of $5,000.

[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.

2. Credit Cards

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.

Go for zero interest: Before slapping this large purchase onto your current credit card, check out zero-interest promotional offers that let you open a new account or transfer your current balance. Read the fine print so you don’t get stuck with retroactive interest if you can’t pay off the balance during the introductory period.
Cash in on rewards: If a new, zero-interest promotion isn’t a possibility, make the most of this purchase by using a credit card with a generous rewards program. Cards that offer cash back are your best bet, but airline miles are another good option—especially if you’re planning an exotic honeymoon getaway.

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.

3. Personal Loans

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:

Unsecured personal loans: An unsecured loan doesn’t require any collateral but often comes with a high interest rate. They are usually approved more quickly than other lines of credit, so you won’t have to wait a week or longer to make your purchase. But beware of fraudulent companies and payday loans that promise quick cash for astronomical interest rates.
Secured personal loans: Many banks offer secured personal loans. Approval requires a form of collateral, which could be something like your savings or, if you own one, your home. Other secured loans may use your car for collateral. Because collateral is part of the deal, you can get a lower interest rate, but you risk losing your collateral if you can’t meet the repayment terms of the loan.

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.

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APR8.98 - 35.99% APR

Loan Amount: $40,000

Loan Term: 36-60 months

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APR7.99 - 35.99% APR

Loan Amount: $36,500

Loan Term: 24-72 months

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APR7.99 - 35.99% APR

Loan Amount: $50,000

Loan Term: 36-60 months

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APR6.99 - 35.99% APR

Loan Amount: $50,000

Loan Term: 24-60 months

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APR8.99 - 35.99% APR

Loan Amount: $50,000

Loan Term: 36-60 months

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APR6.99 - 35.99% APR

Loan Amount: $50,000

Loan Term: 24-60 months

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APR7.99 - 29.99% APR

Loan Amount: $35,000

Loan Term: 24-60 months

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APR8.99 - 25.81% APR

Loan Amount: $99,999

Loan Term: 36-72 months

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APR18.00 - 35.99% APR

Loan Amount: $20,000

Loan Term: 24-60 months

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APR9.95 - 35.99% APR

Loan Amount: $35,000

Loan Term: 24-60 months

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4. Unconventional Avenues

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.

Downsize: We know your sweetie deserves the best, but you’re just starting out your lives together. Why not go for a simpler engagement ring now and upgrade it at your fifth or tenth wedding anniversary?
Go retro: Vintage rings are all the rage, and many of them are much less expensive than a brand-new ring. If there isn’t a family ring to pass on, take a look at what Etsy and eBay have to offer. This way you can score a unique ring with character that doesn’t cost a fortune.
Get a part-time gig: Take on a part-time job at a jewelry store and dive into that employee discount. You can also put all your earnings toward the ring.
Purchase the diamond separately: Don’t be dazzled by a pretty setting or fancy box. The diamond is what you’re really after. You can save big when you buy a loose diamond. Plus, this way you can design a custom setting just for your betrothed.

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