Using your personal savings can help you save money in the long run because you won’t owe any interest, but it can also leave you without cash for other endeavors. There are many alternatives available for consumers hoping to finance their engagement ring, each with its benefits and drawbacks. 

Using a credit card can be convenient and simple but can carry high interest rates. Personal loans often have lower interest rates than credit cards, but it may be more challenging to get approval. Many jewelry stores offer their own financing for shoppers, making it a one-stop shop for fulfilling both your shopping and financing needs. And finally, there are specialized engagement ring financing programs that can offer unique and personalized financing solutions.

Personal Savings

Using your personal savings to pay cash for an engagement ring can help you save money by avoiding financing fees and interest payments. Your credit score would also remain unaffected — which can be beneficial if you plan on financing other purchases soon, like a home. Paying cash also means you won’t have to add another monthly payment to your budget. 

However, using your personal savings on an engagement ring could deplete your funds. It could also tie up cash that you could put toward investing — which has the potential to grow your savings. Using your personal savings could also hinder you from choosing certain rings because you’ll be tied to a specific price range. 

Here’s a hypothetical scenario where someone could save to pay cash on an engagement ring: A California man named John and his partner Marie start talking seriously about their future and their desire to one day get married. John starts putting away $130 from every paycheck with the hopes of paying cash for Marie’s engagement ring, and if plans change, he knows he can use the money instead on another financial endeavor. He sacrifices a new wardrobe and a few weekend restaurant meals to cover the $130 per paycheck. John gets paid twice a month and after 12 months, has $3,120 saved for a ring.

Credit Cards

Credit cards can be valuable and convenient tools for making large purchases, especially if you can secure a 0% annual percentage rate (APR) introductory rate. Promotional periods can offer a reprieve from interest payments for a certain period — anywhere from six to 21 months. The average American has access to approximately $20,000 to $30,000 in credit, which is plenty to cover the cost of most engagement rings. Your credit limit depends heavily on your creditworthiness and what your financial situation qualifies you for. 

Credit cards are notorious for their annual fees and high interest rates, which can quickly make financing with them very expensive. Their convenience and easy access also makes it easy to fall into a debt cycle because of the temptation to use the card on other purchases.

Personal Loans

Personal loans are versatile financial tools that allow borrowers access to funds to pay for a variety of purchases, including engagement rings. These installment loans are typically unsecured, meaning lenders do not require any collateral from the borrower. The loan limits, interest rates, fees and other loan terms depend on the borrower’s creditworthiness — the likelihood of the borrower paying back the funds according to the loan agreement. If you’re struggling with a certain lender’s credit requirements, you can get a personal loan from a friend or family member. 

If you have a strong credit history and credit score, you can typically get approved for a personal loan quickly and enjoy fixed-rate, predictable monthly payments. Personal loans also typically have more competitive interest rates than credit cards, making financing your ring less expensive.

You’ll also want to be aware of the cons of personal loans, like the negative impact they can have on your credit score if you fail to make your payments on time. They can also lead to an increase in debt accumulation if they’re paired with other financial products like credit cards and other loans.

Jewelry Store Financing

Jewelry store financing is a type of in-store retail or point-of-sale financing where borrowers can finance their purchase directly from the retailer. Also known as “buy now, pay later (BNPL)” financing, it allows customers to immediately access their desired goods at checkout without worrying about having the full payment amount. Some stores may offer store credit cards with special promotions and financing perks.

Many jewelry companies advertise their financing options and have well-versed salespeople available to share their financing offers. Jewelry store financing often requires the store to run a hard credit check — requiring shoppers to have a good credit score and history.

Advantages and Disadvantages of Jewelry Store Financing

The advantages of jewelry store financing include convenience and immediate ring ownership. If you’re able to get approved quickly, you can potentially walk away with the new ring on the same day. Jewelry stores also often run financing promotions, offering 0% financing for a fixed period — savvy timing of your ring shopping can help you save significant interest. 

There are also some disadvantages of in-house financing to be cautious of, like strong sales tactics and pressure. Sometimes, offers may be presented to you that aren’t actually the best for your financial situation. Most retailers will also need to run a hard credit check, which can temporarily decrease your credit score. The retailer offering the best financing option may also not have the ring you and your partner are looking for.

Specialized Engagement Ring Financing Programs

Sometimes, choosing a financing option tailored specifically to the purchase you’re making can offer convenience and competitive terms and rates. Specialized engagement ring financing programs are meant to serve consumers looking for a special piece of jewelry, like an engagement ring. These programs typically make it easy for shoppers to apply, offer promotional periods to make the expensive purchase more manageable, and can even offer jewelry-specific benefits like warranties, free cleanings and insurance. The ease and convenience of these programs can sometimes distract consumers from the fine print where hidden fees and penalties might be hiding — make sure you carefully read every part of the financing agreement before signing. There are also many third-party companies available offering BNPL financing options, like Affirm, Afterpay and Klarna.