How To Finance An Engagement Ring
So, you have met the woman of your dreams and the only thing keeping you from being together is the realization of that proposal you’ve been planning. Maybe it’s high time you stopped planning and started walking towards that goal.
I understand you still have student loans to clear up, and your savings are still far from the mark. Worry not, because l can guarantee that this post will give you reasons to go down on one knee, sooner than you expected.
To help you do just that, below is a detailed description of how to finance an engagement ring.
Ask for help from friends and family
The people who know you best can help you achieve your goal by contributing towards your budget. This can be in form of a loan or in kind.
If the latter is a success, then good for you and all the best as you pop the question. However, it the first option is what is available to you, take caution and make sure that any money loaned to you by family is made official through an agreement. This prevents any ill feelings from developing down the line due to misunderstandings about the repayment. Keep your word by paying in the agreed time because by doing so, you will, in turn, avoid incurring any interest charges.
This is especially useful if you are not in a position to get money from a financial institution, because of bad credit.
Try your luck in social financing
You can also be able to get funding on peer-to-peer lending sites. Through such platforms, borrowers are directly connected to lenders. After completing a short profile and bio about yourself, a personal account through which you can post the loan you wish to get is created.
Afterwards, your profile is made visible to lenders and you are notified of the kind of interest they would like you to pay for the loans they are providing. Once an agreement is reached, the funds are dispersed to you for use.
In-store financing program
The trick here is to pay off the ring before the promotional 0%interest period expires because afterward, you might have to pay off extremely high-interest rates. Most jewelers offer store credit cards to facilitate purchases, however, the downside is that you might be tempted to add more items hence negatively affecting your credit scores.
However, you need to find out more information about the following before you commit yourself to the plan.
1. The promotional period and the interest rates that will apply once it’s over
2. If it would be possible to pay off the loan before the promotional period ends
3. The consequences of missing a payment
4. How the interest is assessed and when it starts to take effect
A loan can be availed to you as long as you have some credit history. However, this is quite an expensive route to take as you will end up paying much more for your ring.
Your interest rate is dependent on your credit rating. You will pay more interest if you have a weaker credit rating whereas a stronger rating will get you lower interest rates.
The rates and terms of your loan do not change over time, therefore the monthly rate is fixed and this offers you some kind of assurance.
In this case, however, your credit rating can either work for or against you.
Using your credit card
Using your card responsibly is the best way to avoid unnecessary debt especially as you prepare to enter a new phase of life, marriage.
When you fail to pay the required balance for each month, high rates are imposed and they may eventually go over and beyond the initial amount of the ring.
However, applying for a new credit card with a 0% APR promotion period is the best option. This is because they have a long promotional period as well as a sign-up bonus depending on how much you spend in the first three months.
This can easily be made possible as soon as you purchase an engagement ring.
Please note that accessing these offers is also highly dependent on your credit scores.
Take home message?
Engagement rings are a costly affair especially if you have no repayment plan. Go for a ring that you can afford, and stick to making cash payments if possible, it will save you months of headaches.
Consider shopping online for a ring as it is much cheaper than in a physical store. This will save you time and money, while also giving you the opportunity to see a variety of designs. This way you can able to make a decision that will prepare you for the big question.