When it comes to a big purchase, engagement ring will be the one. On average Brits spend over £1500 on an ring. However, it can go up to £5,000 and sometimes up to £10,000 depending on individual circumstances. Since it is a one-time purchase, you will leave no stone unturned to impress your partner. It is useful if you are paying down the whole money outright in cash regardless of the cost of the ring. However, sometimes it seems hard to pay down the cost outright to meet all of your expenses. You will likely finance your engagement ring. But you will have to be sure that the option you are choosing right fits your budget.
Nothing is more affordable than paying down the whole cost outright because you are paying no penny over the market price. However, if you cannot afford to pay the entire cost outright, it is still essential that you are careful enough with choosing the deal.
This blog discusses how some affordable ways to fund your engagement ring when you do not have enough money to pay in cash.
Consider financing options by a jeweller
All jewelry stores provide financing options to those who cannot afford to pay the whole money right away. Some of the jewellers promote their products that are interest-free. It means you do not need to pay interest as long as the promotional period lasts. It can be tempted to sign the deal, but the devil is in the detail.
If the promotional period expires and you still have money left to pay off, you will end up paying hefty interest. Therefore, if you are looking to finance an engagement ring with a jeweller, you should consider the length of promotional deals.
- An interest-free period is generally between six and 12 months. Make sure that the timeframe is enough to pay off the whole of the money. Do not forget to compare interest rates. It varies from jeweller to jeweller.
- Make sure that the APR is competitive so you could pay off the debt in case promotional period ends.
- Be watchful about hidden fees and other charges. Do not shirk reading fine print to spot hidden costs, and if you have any doubt, do not hesitate to ask.
Note that if you fall behind repayments within the interest-free period, it will terminate immediately and interest will begin to accrue.
Personal loans
If you are not able to secure a deal a financing deal with your jeweller, you can think about taking out personal loans. As the name suggests, these loans are perfect for funding your personal needs. As long as you have a source of income, you can qualify for the loan, and you do not have to put down as anything as security.
Since you can use these loans to fund any of your needs, it does not mean that they are very cheap. Note that personal loans carry high-interest rates. You must compare interest rates before signing the deal. If you have a bad credit rating, you will likely struggle to have the application signed off on.
Don’t worry because options do available in the form of financing alternatives. Loans for bad credit and no guarantor can fulfil your purpose, but it is always recommended that you should fund an engagement ring with such loans when you are paying a large portion of the cost out of your savings. Using the online calculator can help you to get the right estimation.
Credit card
If you do not need a higher amount to borrow, a credit card can also be an ideal option. You can avoid paying interest if you are using a 0% APR credit card provided you pay off the whole of the money within the promotional period. If you are using a standard credit card, you will have to pay off the whole balance within the grace period after the bill is generated.
Nevertheless, you have to shell out interest on your purchase. The engagement ring is not a small purchase, and therefore, it is suggested that you should have a 0% APR credit card to finance it. It will allow you to have a more extended period to settle all your dues.
Note that a credit card is not an ideal option if you are financing a large proportion of the ring cost. If you do so, you will end up paying for it for several years.
Conclusion
You can fund your ring, but you do not need to break your bank. You can do with any of the funding mentioned above sources, but you will have to be very careful. Make sure that you pick the right way matching your budget and needs. The best financing option will be deals offered by your jeweller.
You will have a promotional period to get rid of debt instead of getting indulge in interest rates only. If you want to use a credit card, keep the borrowing limit as small as possible. Personal loans can allow you to borrow a large amount, but they are affordable if you have a good credit rating.
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