At a Glance
Getting engaged and planning a wedding is one of the most exciting and stressful times in life. It’s also costly. Engagement rings can cost thousands of dollars, plus you’ll each need a wedding band for the ceremony, which can be another hundreds or thousands of dollars. While these items signify love and commitment, deciding how to pay for them can be overwhelming.
The good news is there are several ways you can finance a wedding ring depending on your eligibility and needs. Read on to learn more about:
Ways to finance a wedding ring
If you’re preparing to shop for wedding rings, knowing your options for financing the ring can be helpful knowledge to have up front. Here are some to explore:
1. Wedding loans
Wedding loans, a type of personal loan, can be an easy and convenient option for wedding ring financing. Personal loans are a type of installment loan, which means you pay the loan back over a set period (or term) plus interest and fees. They usually have fixed interest rates and monthly payments, so it’s easy to budget for and calculate how much you’ll owe over the full term.
Personal loans are also unsecured, meaning you don’t have to have any collateral to qualify.
Eligibility requirements for personal loans vary by lender, but in most cases, you need to have a good credit score (670 and above) to qualify for better interest rates and terms. The higher your credit score, the better. Lenders also have different income requirements, loan minimums and maximums, and other qualifications. But, because personal loans can be used for just about anything, you can put the funds toward your rings.
When shopping for a wedding loan, be sure to compare rates from multiple lenders to find the best loan for you.
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2. Credit cards
Using your regular credit card to buy a wedding ring may not be the best option unless you’re able to pay it off in full that billing cycle. Otherwise, you’ll have high interest on the balance and your credit score could take a hit.
However, you could take advantage of a 0% introductory credit card. These cards allow you to carry a balance on the card for a certain period (typically 21 months or less) without paying interest on the balance. This gives you more time to pay off the ring without owing interest or hurting your credit score.
If you choose a 0% APR rewards credit card, you can also earn rewards points or miles on the purchase.
Keep in mind this option may only work for borrowers with good credit (690 or higher); otherwise, the credit card company may not approve your application. You should also ensure you can pay off the ring before the introductory period is over. If not, you’ll be charged a high interest rate on the remaining balance.
3. Jewelry store financing
Most major jewelry retailers offer in-house financing options to their customers. This can be done in-store or online. With jewelry store financing you get to leave the store with a wedding ring in your hand, and you’ll make monthly payments toward the installment loan balance (plus interest).
The biggest benefit to jewelry store financing is it typically has more flexible credit requirements compared to borrowing through a bank. However, you’ll want to do some research on the requirements to ensure you meet credit, income, minimum purchase amount, and other requirements. Also ensure they have repayment terms that fit your budget.
4. Buy now pay later for wedding rings
BNPL loans, also called “point-of-sale financing,” are provided through online services like Affirm, Klarna, and Afterpay. BNPL is becoming more popular for shopping online because of the ease of use and ability to pay over time, often with no or low interest.
In most cases, you must pay a percentage of the total purchase price up front. Then, you must make equal payments over a short period of time to pay off the remaining balance. The repayment term can vary, but they are usually shorter than personal loans or in-store financing.
These loans don’t trigger a hard credit inquiry so your credit score won’t take a hit to qualify. On-time loan payments are also not usually reported to the credit bureaus, which means they won’t help your score, but late payments are often reported and that can do damage.
Depending on your credit, you may be able to get a BNPL loan with no interest.
5. Home equity loan
If you own your home and have some home equity, you may qualify for a home equity loan (HEL). Essentially a second mortgage, this is a secured loan that lets you borrow a fixed amount against the equity in your home. Typically, you can borrow up to 85% of your home’s equity.
HELs often have lower, fixed interest rates, and you’ll pay the loan back over a certain period. However, because your home is used as collateral, you risk losing your home if you default on the loan.
These loans are best for those who have equity in their home, are looking for lower interest rates, and have confidence in the ability to repay the loan in full.
Pros and cons of wedding ring financing
How much should you budget for your wedding ring?
The cost of a wedding ring depends on the size, shape, type of metal, and type of stone, but according to The Knot 2021 Jewelry and Engagement Study, the average cost of a female wedding band was $1,100, while the average cost of a men’s band was $550.
How much you should spend on your wedding rings depends on what type of rings you and your partner want, though there are ways to make it cost less. For example, lab diamonds can be as much as 70% cheaper than natural diamonds, and moissanite is approximately one-tenth the cost of a mind diamond of equal size and quality.
Talk to your local jeweler or do you research beforehand to learn more about your options that fit within your budget.
Related: Wedding Budget Calculator
Can you finance a wedding ring with bad credit?
Yes, there are some wedding ring financing options even if you have poor credit. For example, in-store financing has more flexible requirements and may work with borrowers as long as you meet other requirements. BNPL loans don’t check your credit score, so you can qualify for those regardless of your credit. Some wedding loan lenders will also work with borrowers with poor credit, though you may need to get a secured loan or have a co-signer.
Most wedding ring financing lasts between two and seven years, though BNPL loan terms are shorter (three, six, or 12 months). Most financing options offer terms from 12 to 48 months.
According to recent studies, the average cost of an engagement ring is $5,000, though this can be depending on the type of metal, type of stone, setting, cut, and other details. Wedding bands also range from $550 to $1,100 (on average), depending on the same factors.
Most lenders prefer borrowers to have good credit to qualify for financing or a score of at least 670. Other lenders prefer you to have a score of at least 720. The higher your score, the lower interest rates you’ll qualify for, and you may get better loan term offers. Even if you have poor credit there are options, such as BNPL loans or a wedding loan from a lender who works with borrowers with bad credit.
Depending on the type of financing you choose, financing a wedding ring can help you build credit. The financing option must report your payment activity to the major credit bureaus, such as through a jewelry store, using a jewelry or retailer credit card, or a wedding loan. To have a positive impact on your credit, make sure you’re making your payments on time and in full, and keep your credit utilization ratio low.