4 Ways to Finance an Engagement Ring

5 min read

Posted on June 27, 2022

happy couple who financed their engagement ring

Proposing may be one of the most exciting times of your life, but it can also be one of life’s most expensive experiences. And even though you want only the best engagement ring for your loved one, you’d prefer not to go broke in the process. So what are your options?

Depending on your credit score, budget and personal financial goals, the following may be viable options for financing the purchase of an engagement ring.

1. Personal Loan

personal loan is a type of debt offered by banks, credit unions, and online lenders. You receive a one-time cash deposit from a lender, which you repay by making monthly payments plus interest for a certain length of time.

But is it worth it to take out a personal loan to pay for an engagement ring? Let’s take a look at the pros and cons.

Specific to financing an engagement ring, the benefits of using a personal loan may include:

  • Quick Access to Cash: The application process for a personal loan is straightforward and generally takes no longer than two weeks (and sometimes as quickly as 24 hours). Once approved, the lender may deposit directly into your bank account within two to five business days.
  • Repayment Flexibility: Most personal loans carry a repayment term of 1 to 7 years. So, you can pay the ring back on a schedule that fits your personal financial situation rather than paying in full today.
  • Lower Interest Rates Compared to Credit Cards: On average, the interest rate on personal loans (10%-28%) is generally lower than on credit cards (16%-24%). Thus, a personal loan may cost you less and require lower monthly payments, thanks to a potentially lower interest rate.
  • Spending Flexibility: A personal loan doesn’t restrict spending to a specific project or purchase. If you have cash left over after purchasing an engagement ring, it can help finance other high-cost items such as a wedding ring or the wedding itself.

Note: Low interest rates or extended repayment terms are dependent on your credit score, debt-to-income ratio, and overall creditworthiness among other things. Because of this, it’s worth running your information through an online marketplace’s pre-qualification process. This lets you see if the rates and terms the lender may offer you are within your means. Better yet, pre-qualify with several lenders to explore a broader range of available offerings.

Of course, there are a few downsides to taking out a personal loan to finance the purchase of an engagement ring.

  • Extra Fees: Some lenders may charge an origination fee for expenses related to processing your application. Origination fees are typically 1% – 8% of your loan amount. The lender may also charge a fee – often referred to as a prepayment penalty – for repaying the loan in full before the due date.
  • Eligibility for Preferred Rates and Terms: To receive a lower interest rate or extended repayment term, you need a good to excellent credit score (no lower than 670) for many lenders. If you have poor credit, your loan offer may have a higher interest rate or a shorter repayment term, which may make the loan unaffordable.
  • Promotions: Personal loans don’t have 0% interest rate promotions as you might find with a credit card. So if you intend to pay the engagement ring off in less than a year, a personal loan may not make sense.

NNote: You may pre-qualify with a lender and find that the offered interest rate or repayment terms are higher/shorter than expected.

2. Credit Cards

To use a credit card to finance the purchase of an engagement ring, you can either use a card you already have or apply for a new card.


  • No Set Payoff Date: A credit card does not set a payoff date, giving you flexibility over when you finish paying for the engagement ring, though there is a monthly minimum payment due date.
  • Promotions: Many credit cards offer introductory promotions of a 0% interest rate for a year (sometimes longer). If you pay off the engagement ring within that time frame, you may not incur interest.


  • Higher Interest Rates: Credit cards typically bear higher interest rates than personal loans, making them potentially more expensive over time.
  • Credit Score Implications: If purchasing an engagement ring with your credit card puts you at 30% or more of your limit, your credit score may take a negative hit.
  • Minimum Payments: If you only pay the minimum each month, it may take years to pay-off the ring thanks to higher interest rates.

With these pros and cons in mind, a credit card may be a good alternative to a personal loan if you qualify for a new credit card with a 0% interest promotional period or have an existing card with a high credit limit.

3. Store Financing

Similar to how you may finance a car directly with the automaker, some jewelry stores may allow you to finance an engagement ring through the store. Financing with a jewelry store is available in monthly installments or a store credit card.


  • Promotions: Jewelry stores (like credit cards) may offer a promotion in which, for a specific period (often 6-12 months), your loan has a discounted interest rate, if not 0%.
  • Lower Eligibility Threshold: Although a jeweler will run a credit check before offering you financing, the jeweler’s expectations may be less stringent than a lender’s for a personal loan.
  • Perks: Some jewelers may offer extra perks if you finance directly with the store, including free shipping.


  • Down Payment: Jewelers may require a down payment before you can be eligible for financing, which may cost more upfront than you’re willing to pay.
  • Deferred Interest: It’s important to read the fine print on jewelry store financing arrangements as interest may be charged retroactively to the promotional period.
  • Limited Use: A store credit card will likely only be valid at the store, resulting in a line of credit with minimal use.

Based on these facts, financing with a jeweler may be a good alternative to a personal loan if you have poor credit and are thus likely to receive better terms through the jewelry store.

4. Savings

You may decide to hold off on purchasing an engagement ring until you have enough savings to pay in cash.

If so, the Knot offers some valuable tips on how to save for an engagement ring:

  • Communicate your intent to purchase the ring with your significant other, creating a commitment to save.
  • Give yourself a realistic deadline based on the ring you want and the finances you already have.
  • Use software explicitly designed to help you automatically save for large purchases.
  • Temporarily spend less in other areas to speed up the savings process.

Although this approach may take longer than you initially planned, it may allow you to come out of the purchase debt-free.

What Is The Average Cost of an Engagement Ring?

You can’t plan to finance an engagement ring until you know the average price of a ring and how much you can afford.

But what is the average price? Didn’t you hear somewhere that three months’ salary is the standard?

According to a survey of 5,000 recently engaged couples, as documented in The Knot 2021 Jewelry and Engagement Studythe average price of an engagement ring is $6,000. However, it’s worth noting that 8% spend less than $1,000, and roughly 33% spend between $1,000 and $4,000. Of course, the price of an engagement may vary based on where you live. For example, according to the same study by The Knot, the average cost in the Mid-Atlantic is $7,900. In contrast, the average price in the Midwest is $5,200.

Whether budgeting $1,000 or $7,000, the ring will cost a pretty penny. So what are your options for funding such a large purchase?

Next Step: Research the Best Financing Option for You

Whether you’re looking to finance your engagement ring through a personal loan, credit card, jeweler, or savings account, it’s essential to consider your budget and shop around for the best terms and rates.

And while you’re at it, ask yourself:

  • Is my credit score high enough to qualify for lower interest rates, long repayment terms or a high credit limit?
  • Does the overall long-term cost of financing align with your long-term financial goals?
  • Can you afford monthly payments?

If you’ve answered these questions in the affirmative and are ready to start financing an engagement ring, see what rates and terms you will be eligible for by pre-qualifying.


The information provided in this blog post is not intended to provide legal, financial or tax advice. We recommend consulting with a financial adviser before making a major financial decision.

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