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Engagement rings can be expensive — the average cost of an engagement ring is $5,500, according to The Knot. Thankfully, there are a few types of engagement ring loans that could help you cover this expense.
Here’s what you should know about engagement ring loans:
- 4 ways to finance an engagement ring
- What to look for when deciding on a type of financing
- How much engagement ring can I afford?
- Can you finance an engagement ring with bad credit?
- How to get the best personal loan rate
4 ways to finance an engagement ring
If you decide to take out a loan to pay for an engagement ring, it’s important to compare as many of your options as possible to find the right loan for your needs.
Here are four loan types to consider:
|Average rates||Possible fees||Availability||Time to fund|
|Personal loan||10.49%||Can be used for almost any personal expense||Typically one week or less
(depending on the lender)
|In-store financing||Might charge up to 21% or more|
(depending on the lender)
|Limited to certain stores||Typically same day|
|Buy now, pay later loans||Up to 30% APR |
(depending on the lender and plan)
|Might be limited to certain stores||Typically same day|
|Credit cards||16.22%||Can be used for almost any purchase||Approval could be same day up to a week or more|
1. Personal loan
Personal loans can be used for almost any personal expense — including engagement rings — and are offered by online lenders as well as traditional banks and credit unions. With a personal loan, you can typically borrow $600 up to $100,000 or more with one to seven years to repay it, depending on the lender.
Advantages of a personal loan
- Fixed rates: Personal loans generally have fixed rates, which means your payments will stay the same throughout the life of the loan. Additionally, personal loan rates are typically lower than credit card rates.
- Long repayment terms: You could have up to seven years to repay a personal loan, depending on the lender. Just keep in mind that if you choose a longer term, you’ll pay more in interest over time.
- Fast application process: Many lenders provide an easy online application process as well as fast approval decisions.
Drawbacks of a personal loan
- Fewer options for poor or fair credit: You’ll typically need good to excellent credit to qualify for a personal loan — a good credit score is usually considered to be 700 or higher. There are also several lenders that accept lower credit scores, but you’ll likely pay more in interest with these bad credit loans.
- Might come with fees: Some lenders charge fees on personal loans, such as origination fees or late fees. These can add to your overall loan cost.
- Longer funding times: The time to fund for a personal loan is usually about one week — though some lenders will fund loans as soon as the same or next business day after approval. This means you might be waiting longer to get your money compared to other options.
If you decide to take out a personal loan, remember to consider as many lenders as possible. This way, you can find the right loan for your needs.
Here are Credible’s partner lenders that offer personal loans for engagement rings:
|Lender||Fixed rates||Loan amounts||Min. credit score||Loan terms (years)|
|9.95% - 35.99% APR||$2,000 to $35,000**||550||2, 3, 4, 5*|
|6.79% - 17.99% APR||$5,000 to $35,000||740||1, 2, 3, 4, 5|
|4.99% - 35.99% APR||$5,000 to $35,000||600||2, 3, 4, 5|
|5.99% - 24.99% APR||$2,500 to $35,000||660||3, 4, 5, 6, 7|
|7.99% - 29.99% APR||$10,000 to $50,000||Not disclosed by lender||2, 3, 4, 5|
|7.04% - 35.89% APR||$1,000 to $40,000||600||3, 5|
|15.49% - 35.99% APR||$2,000 to $36,500||580||2, 3, 4|
|2.49% - 19.99% APR||$5,000 to $100,000||660||2, 3, 4, 5, 6, 7
(up to 12 years for home improvement loans)
|6.99% - 19.99% APR1||$3,500 to $40,0002||660|
(TransUnion FICO®️ Score 9)
|3, 4, 5, 6, 7|
|18.0% - 35.99% APR||$1,500 to $20,000||None||2, 3, 4, 5|
|5.99% - 17.99% APR||$600 to $50,000 |
(depending on loan term)
|670||1, 2, 3, 4, 5|
|6.95% - 35.99% APR||$2,000 to $40,000||640||3, 5|
|5.99% - 18.83% APR||$5,000 to $100,000||Does not disclose||2, 3, 4, 5, 6, 7|
|8.93% - 35.93% APR7||$1,000 to $50,000||560||3 to 5 years 8|
|5.94% - 35.97% APR||$1,000 to $50,000||560||2, 3, 5, 6|
|4.37% - 35.99% APR4||$1,000 to $50,0005||580||3 to 5 years4|
Learn More: How to Get a Personal Loan
2. In-store financing
Several jewelers and department stores offer their own financing options, sometimes with 0% APR. For example, Kay Jewelers offers 0% APR financing on repayment terms from six to 18 months for borrowers who use the Kay Jewelers Credit Card — meaning you could avoid paying any interest if you repay your balance within this time period.
Advantages of in-store financing
- 0% APR offers: Some stores offer 0% APR if you pay off your balance within a certain time frame. This means you could avoid paying any interest if you repay your balance in time. However, keep in mind that if you can’t pay off the loan before this period ends, you could end up paying high interest charges.
- Less stringent qualifying criteria: If you have poor or fair credit, you might have an easier time qualifying for in-store financing compared to other options.
- Additional rewards or perks: You might qualify for other perks or rewards with in-store financing. For example, Kay Jewelers Credit Card holders enjoy free shipping on certain purchases as well as special coupons.
Drawbacks of in-store financing
- Interest might be deferred and charged retroactively: While you might qualify for 0% APR financing in some cases, make sure to read the fine print. If you don’t meet the exact requirements for the promotion — such as paying off your balance before the promotional period ends — you could be retroactively charged for all of the interest accrued since your purchase date.
- Higher interest rates: Store cards sometimes have higher interest rates compared to other options. Unless you take advantage of a 0% APR offer, you could end paying much more overall with in-store financing.
- Limited use: Unlike traditional credit cards, store cards that come with in-house financing can generally only be used at that store.
3. Buy now, pay later financing
Another way to cover the cost of an engagement ring is through a “buy now, pay later” lender — such as Affirm, Afterpay, PayPal, or Klarna. With this type of financing, you can purchase an engagement from a merchant now and then pay it off over time.
Advantages of buy now, pay later financing
- Easy and quick to use: Many lenders let shoppers choose buy now, pay later financing directly from their shopping carts when they check out.
- Might not have to pay interest: Some buy now, pay later lenders offer 0% APR financing in certain cases. For example, with PayPal Credit, you won’t pay any interest if you pay off your purchase within six months. With Klarna, you can opt to split your purchase into four equal installments with no fees or interest.
- Applying likely won’t hurt credit score: Most buy now, pay later lenders don’t perform a hard credit check with applications. This means you can apply without affecting your credit score.
Drawbacks of buy now, pay later financing
- Credit limits could apply: Some buy now, pay later lenders have low credit limits to start — for example, Sezzle users are generally limited to $50 to $100 purchases to start. This might not be enough to fully cover the cost of an engagement ring.
- Might require a down payment: Depending on the lender you choose, you might have to provide a down payment to finance your engagement ring.
- Could lead to long-term debt: Because buy now, pay later options are so convenient, it could be tempting for some borrowers to continually rely on them. This could lead to more debt than you can easily manage to pay off.
4. Credit cards
In some cases, a credit card might be the right option. With a credit card, you’ll have access to a credit line that you can repeatedly draw on and pay off.
Additionally, some cards come with a 0% APR introductory offer, which means you could avoid paying interest if you repay your balance before this period ends. However, if you can’t pay off the card in time, you could be stuck with some hefty interest charges.
Advantages of credit cards
- Might not pay interest: If you get a card that comes with a 0% APR introductory offer, you could avoid paying any interest so long as you pay off your balance in time.
- Can be used more than once: Because a credit card is a type of revolving credit, you can continue using it after paying for an engagement ring. This could be helpful if you need to cover other wedding expenses.
- Could help you build credit: If you make on-time payments and keep your balance low, you could see an improvement in your credit over time.
Drawbacks of credit cards
- Higher interest rates: Credit cards typically come with higher interest rates than personal loans. Unless you pay off your balance in full each month or take advantage of a 0% APR offer, you could end up paying far more in interest compared to other options.
- Variable rates: Credit cards typically come with variable interest rates, which means your rate could fluctuate over time.
- Could be tempting to rack up a balance: It can be easy to get in the habit of swiping your credit card without thinking about it — which could eventually land you with a high balance to repay. And if you only make minimum payments on your card, it might take a long time to pay off. Carrying a high balance could also hurt your credit in the long run.
Check Out: Personal Loan vs. Credit Card
What to look for when deciding on a type of financing
Here are several important factors to consider to help you decide on the best type of financing for your situation:
- Interest rate: The interest rate on a loan is the main factor that will determine your overall loan cost — essentially, interest is the price you pay for borrowing money. If you can qualify for a low interest rate, you’ll pay less in interest over the life of your loan.
- Monthly payments: Be sure to check your budget (or create one) to see how much you can afford to pay each month. Your monthly payments should fit comfortably in your budget. If the payments will stretch your finances too thin, consider borrowing less or saving up more money first.
- Repayment term: Some options require borrowers to repay their loan within a few months while others let you pay off your balance over several years. If you need a low monthly payment, choosing a longer term to spread out your payments could be a good idea. However, this also means you’ll pay more in interest over time — and you might still be in debt by the time you get married. In general, it’s best to pick the shortest term you can afford to keep your interest costs as low as possible.
- Fees: Some financing options come with fees that will increase your overall loan cost. For example, personal loan lenders sometimes charge origination fees while credit cards might come with annual or cash-advance fees. Other options might charge prepayment penalties if you pay off the loan ahead of schedule. Before you take out a loan, make sure to read the fine print so you’ll know what fees to expect.
How much engagement ring can I afford?
How much you can afford to borrow for an engagement ring will depend on your financial situation and current budget.
You can use the personal loan calculator below to estimate your monthly payments as well as your total repayment cost — this way, you can determine whether you can afford the overall loan cost before you borrow.
Enter your loan information to calculate how much you could pay
With a $ loan, you will pay $ monthly and a total of $ in interest over the life of your loan. You will pay a total of $ over the life of the loan.
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Can you finance an engagement ring with bad credit?
You might still be able to finance an engagement ring with bad credit. While you’ll typically need good to excellent credit to qualify for a personal loan, there are also several lenders that offer personal loans for bad credit. Just keep in mind that these loans tend to come with higher interest rates compared to good credit loans.
You could also consider applying for in-house financing or a buy now, pay later program as these options generally don’t require as good of credit as personal loans and credit cards.
How to get the best personal loan rate
Here are a few strategies that could help you qualify for a good interest rate on a personal loan:
- Have good credit. You’ll generally need good to excellent credit to get approved for the lowest advertised rates available. In general, the higher your credit score, the better your interest rate. If you can wait to take out a personal loan, you might consider spending some time improving your credit score first to qualify for better rates in the future. Some potential ways to do this include making on-time payments on all of your bills, paying down credit card balances, or becoming an authorized user on the credit card account of someone you trust.
- Apply with a cosigner. Having a creditworthy cosigner could help you qualify for a loan as well as possibly get you a lower rate than you’d get on your own.
- Compare lenders. Shopping around and comparing loan options from as many lenders as possible can help you find a loan with the most favorable rate and terms for your needs.
If you’re ready to start comparing lenders, Credible can help: You can see your prequalified rates from multiple lenders that offer personal loans for engagement rings in two minutes — without affecting your credit.
Keep Reading: How to Get a Personal Loan With a 600 Credit Score
About Rates and Terms: Rates for personal loans provided by lenders on the Credible platform range between 4.99-35.99% APR with terms from 12 to 84 months. Rates presented include lender discounts for enrolling in autopay and loyalty programs, where applicable. Actual rates may be different from the rates advertised and/or shown and will be based on the lender’s eligibility criteria, which include factors such as credit score, loan amount, loan term, credit usage and history, and vary based on loan purpose. The lowest rates available typically require excellent credit, and for some lenders, may be reserved for specific loan purposes and/or shorter loan terms. The origination fee charged by the lenders on our platform ranges from 0% to 8%. Each lender has their own qualification criteria with respect to their autopay and loyalty discounts (e.g., some lenders require the borrower to elect autopay prior to loan funding in order to qualify for the autopay discount). All rates are determined by the lender and must be agreed upon between the borrower and the borrower’s chosen lender. For a loan of $10,000 with a three year repayment period, an interest rate of 7.99%, a $350 origination fee and an APR of 11.51%, the borrower will receive $9,650 at the time of loan funding and will make 36 monthly payments of $313.32. Assuming all on-time payments, and full performance of all terms and conditions of the loan contract and any discount programs enrolled in included in the APR/interest rate throughout the life of the loan, the borrower will pay a total of $11,279.43. As of March 12, 2019, none of the lenders on our platform require a down payment nor do they charge any prepayment penalties.