Financing an engagement ring: What you need to know

If you’re asking someone to marry you, deciding how to pop the question is just one part of the equation. Buying the ring is another. In 2023, the average cost for an engagement ring was around $5,500, according to The Knot. If you don’t want to pay cash or can’t afford to, you have a few engagement ring financing options.

What is engagement ring financing?

Financing an engagement ring allows you to pay it off over time rather than having to pay in cash upfront. Depending on the type of engagement ring loan you choose, you could spread payments out over years or months, and you could pay interest to borrow the money or no interest (more typical for short-term loans). 

The best type of engagement ring financing depends on how much you can afford to pay monthly, the type of ring you want, and what you can qualify for. 

Can you finance an engagement ring?

Yes, you can finance an engagement ring as long as you can qualify for engagement ring financing. Typically, that means having sufficient income to afford monthly payments and a good enough credit score, as well as meeting any other credit requirements. 

There are different ways to finance an engagement ring, and some tend to have more stringent requirements than others. But if your FICO credit score is at least 670, and your debt-to-income ratio (DTI) is less than 36%, you’re likely to find a lender willing to work with you.

Also consider how to finance an engagement ring. Financing plans for an engagement ring can come in different forms, but, in general, it looks like any other sort of payment plan. You borrow money from a lender and then pay it off — often with interest — over time.

There are multiple ways to finance an engagement ring, including credit cards, personal loans, store financing, or “buy now, pay later” services (BNPL).

Pros and cons of engagement ring financing

Pros

• Long-term repayment: Financing a ring allows you to pay for it over months or years if you don’t have the money now.
• Special financing: You may be eligible for 0% annual percentage rate (APR) financing through your credit card or an in-store financing promotion. Just be aware of deferred interest promotions — if you don’t pay off the balance within the promotional period, you’re charged interest retroactively from the purchase date.
• Increased budget: Financing often allows you to purchase a more expensive ring than you can with cash.

Cons

• Could make it hard to qualify for other loans: Financing an engagement ring means taking on an extra monthly payment and increasing your DTI, which could make it harder to qualify for another loan, like a mortgage or auto loan.
• Interest charges: Unless you can get 0% financing, interest charges on an engagement ring loan could increase the purchase price by hundreds (or even thousands) of dollars .
• Increased financial burden: Starting a new life together is exciting, but combining households and finances can also be challenging. Consider how the debt could impact you and your partner’s finances going forward.

Check out: How to pay off debt fast

Ways to finance an engagement ring

Credit card

Best if: You can qualify for a 0% APR credit card and pay it off within the introductory period.

Credit cards aren’t always the best choice for large purchases since they tend to have high interest rates — an average of 21.59% as of February 2024, according to the Federal Reserve.

But if you have good credit (a FICO score above 670), you may be able to qualify for a 0% APR credit card with a promotional period on purchases for anywhere from six months to two years. If paid off before the 0% rate expires, this can be a great way to finance an engagement ring for the same cost as paying cash.

Keep in mind that using a credit card with a normal purchase APR to pay for an engagement ring — or using a 0% APR promotional rate but not paying the balance off in time — could be a risky move. It can lead to high interest charges and high credit utilization, which could damage your credit score, especially if you miss or make late payments.

Personal loan 

Best if: You have good or excellent credit and prefer a years-long repayment period, or don’t qualify for a 0% APR.

A personal loan is an installment loan, meaning you borrow a lump sum of money, and then pay it back in monthly installments. Personal loans offer repayment terms up to seven years (varies by lender), and have some key advantages over credit cards, including fixed interest rates, fixed monthly payments, and lower average interest rates if you have good credit.

Because of the longer repayment terms, a personal loan might be a good option if you can’t pay off the balance within the 6-24 month 0% APR introductory period on a credit card or you don’t qualify for one.

In-store financing

Best if: You can pay off the balance within the promotional period.

Many jewelry stores offer their own payment plans to customers. Stores may offer 0% financing if you repay the loan within a certain period, allowing you to essentially finance the ring for free.

However, if you don’t repay the balance by the end of the promotional period, you could be charged interest on the full balance back to the date of the purchase (also called deferred interest). In other words, you would owe all the interest you would have paid if at the loan’s standard rate.

Check whether the offer charges deferred interest before accepting it. If so, only consider this option if you feel confident you can pay off the entire ring within that period.

Buy now, pay later

Best if: You can pay off the ring in four bi-weekly payments.

Buy now, pay later (BNPL) apps have become popular tools for online shopping. BNPL financing is similar to other forms of financing but takes place over a much shorter period which allows you to finance interest-free. For example, many BNPL apps, like Affirm or Afterpay, require that you repay a purchase within four biweekly payments to avoid interest.

Some jewelry stores list BNPL services as financing options for their products. You can pay off your ring with four interest-free payments. However, given the high price of many engagement rings, you may need more time. In that case, you can pay your purchase off over two years, but you’ll pay interest.

Like other types of financing, your BNPL interest rate is based on your credit score. Rates are similar to personal loan rates, and can be as high as 36% for longer-term financing.

Engagement ring financing with bad credit

You may qualify for engagement ring financing with bad credit by seeking out a personal loan available to borrowers with bad credit or by using a credit card you already have. Some jewelry stores also offer financing to those with bad credit. Keep in mind, however, that either of these options could result in paying a high interest rate.

Consider asking a close friend or family member to cosign a personal loan with you to purchase an engagement ring. This could lead to better rates and terms than applying on your own. Keep in mind that if you miss payments, your cosigner will be on the hook as well.

Secured loans are also an option for those with bad credit. However, if you default on a secured loan, your collateral may be repossessed. Therefore, if you purchase an engagement ring with a secured loan, make sure the monthly payments are affordable.

FAQ

Is it better to finance an engagement ring or pay in cash?

In most cases, it’s better to pay for an engagement ring — or any large purchase — in cash. However, if you qualify for 0% APR financing, it could be a good option to extend paying off the ring without adding any interest charges.

What happens if I decide to return the engagement ring after financing it?

If you decide to return the engagement ring, you’ll still have to repay the money you borrowed. You can use the money from the ring return to pay off the balance or continue to pay it off over time.

How long does it take to get approved for engagement ring financing?

In many cases, you can get approved for engagement ring financing on the spot. In some cases, a lender may need more information or additional time to consider your application, and that could take several days.

Read more:

• Where can I get a personal loan?
• What is personal loan pre-approval
• Best personal loan rates
• Best fast personal loans
• Best online loans
• Best personal loans with a cosigner