Should You Use a Personal Loan for an Engagement Ring?

Updated on April 9, 2024

At a Glance

  • Considering a personal loan for an engagement ring?
  • These loans are unsecured with fixed rates and offer quick fund access.
  • However, they can lead to added debt and interest costs.
  • Always assess your budget, credit score, and long-term goals. Remember, a ring’s value is its symbolism, not its price.

Considering proposing? Before diving in, evaluate the financial aspect of an engagement ring. While some recommend spending $700-$1,200, others suggest 1-2% of your yearly income. To manage the cost, many are turning to personal loans. In this article, we’ll weigh the benefits and drawbacks of financing a ring with a personal loan.

Should You Get a Loan for an Engagement Ring?

The decision to finance an engagement ring with a loan is significant and should be made after carefully considering your financial situation and priorities. Let’s break down the key factors to help you make an informed decision:

Assess Your Budget

The first and most important factor to consider is your budget. It is critical to determine how much you can safely afford to spend on an engagement ring without risking your overall financial security. Examine your income, existing spending, and savings to get a clear picture of what is truly affordable.

Understand Your Credit Score

Lenders often rely on credit scores to evaluate your creditworthiness and determine the interest rate they’ll offer. If you have a good credit score, you’ll likely qualify for lower interest rates, making the loan more affordable. However, if your credit score could be better, you might end up with higher interest rates, which can significantly increase the overall cost of the ring.

Consider Long-Term Financial Goals

While an engagement ring symbolizes love and commitment, weighing the impact of additional debt on your plans is essential. If suppose you have other financial goals, such as saving for a house, starting a family, or investing in your education, In that case,  it may be wise to prioritize these goals over purchasing an expensive ring.

Weigh the Pros and Cons of a Loan

When contemplating a personal loan for an engagement ring, it’s crucial to evaluate the advantages and disadvantages carefully. On the one hand, a loan allows you to acquire the ring upfront and spread the cost over time, which can be helpful if you need more savings for an outright purchase. On the other hand, taking on debt means you’ll be paying interest, potentially increasing the overall cost of the ring.

Prioritize Love and Commitment

Above all, it’s important to remember that the core value of an engagement ring lies in the love and commitment it represents, not its size or price tag. It is critical to have open and honest conversations with your partner about your financial condition and expectations. You can look at options that are in line with your financial objectives and personal values.

Consider Alternatives

Consider alternatives if the prospect of a loan for an engagement ring seems challenging. One such alternative is saving up for the ring over time. Setting aside a portion of your monthly income allows you to gradually accumulate the funds needed to purchase the ring without taking on any debt. This approach enables you to prioritize your long-term financial goals while still being able to afford a meaningful and special engagement ring.

4 Pros of Using a Personal Loan for an Engagement Ring

Making the commitment to propose can be both exhilarating and nerve-wracking, especially when considering the financial aspect of purchasing an engagement ring. A personal loan can provide a solution for those who haven’t saved up enough for the big purchase. Here are some of the benefits of using a personal loan for this special occasion:

1. Unsecured Nature

Personal loans are typically unsecured, meaning you won’t need to pledge any assets as collateral. This ensures you won’t risk losing assets if you default on the loan, offering peace of mind.

2. Fixed Monthly Payments

Most personal loans come with fixed interest rates, leading to consistent monthly payments and ease of budgeting.

3. Flexible Repayment

Various loan term options allow you to spread out payments over several years, making the financial burden more manageable.

4. Quick Access to Funds

Many lenders approve personal loans swiftly, providing funds within a few business days. This is especially helpful if you’re keen on making an immediate purchase.

6 Cons of Using a Personal Loan for an Engagement Ring

While personal loans offer a convenient way to finance an engagement ring, they come with their own set of challenges. It’s crucial to be informed about potential pitfalls before diving into this financial commitment. Below are some of the drawbacks to be aware of when considering a personal loan for that special piece of jewelry:

1. Additional Debt

Acquiring a personal loan means taking on added debt, potentially affecting future financial plans like weddings or home purchases.

2. Interest Costs

Despite potentially competitive rates, you’ll ultimately pay more than the initial ring price due to interest.

3. Interest Rate Variability

The interest rates on personal loans can differ significantly based on factors like your credit score. A less-than-perfect score might land you a high rate, increasing the loan’s overall cost.

4. Origination and Other Fees

Some lenders charge origination fees, which can be 1%-6% of the loan amount. Additionally, you might face other costs like late payment or prepayment penalties.

5. No 0% Introductory APR

Unlike certain credit cards that offer a period of 0% APR, personal loans don’t have this perk. Without this interest-free advantage, borrowers need to scrutinize the loan’s interest rate and repayment terms.

6. Potential to Overspend

Access to loan funds might encourage you to purchase a more expensive ring than you would’ve otherwise.

How to Get a Personal Loan for an Engagement Ring: 5 Steps

If you’re considering stretching beyond your budget for that perfect engagement ring, a personal loan might be the solution. This financing option can be suitable if you qualify for a competitive rate and can commit to a repayment period spanning multiple years. Here’s a roadmap to guide you through securing a personal loan for this purpose:

Step 1: Research Lenders

Find lenders offering the loan amount you desire.

Tip: Since lender terms vary, focus on those with competitive APR and favorable repayment conditions.

Step 2: Pre-Qualification

Gauge the loan terms you might be eligible for without affecting your credit.

Tip: If your credit is not stellar, recognize that your borrowing terms might differ from those with higher scores. Pre-qualification, not involving a hard inquiry, provides insights without damaging your credit score.

Step 3: Choose a Lender

After identifying the best fit, formally apply with that lender.

Tip: This step will initiate a hard credit inquiry. Prepare by gathering essential documents, including pay stubs, tax returns, banking data, and residency proof.

Step 4: Receive Funds

Access the loan amount.

Tip: Post-approval, the loan amount is typically disbursed to your bank within a few days, ready for use.

Step 5: Purchase the Ring

Use the funds to buy your chosen engagement ring.

Tip: After the disbursement, consider setting up auto-debit for monthly loan repayments to ensure punctuality and financial discipline.

Remember, while a loan can facilitate your purchase, prioritize transparent communication with your partner about financial decisions and implications.

Alternatives to Finance an Engagement Ring

Considering a personal loan for an engagement ring? It’s just one avenue available. Here are various alternatives to explore:

1. Savings

Purchase the ring outright when you’ve saved enough, avoiding any added financial commitments.


  • No monthly payments or interest; financial peace of mind.

2. Credit Cards

Utilize a card with a 0% APR introductory offer or apply for one. Be cautious of standard credit card interest rates, which tend to be higher than personal loan rates.


  • Introductory 0% purchase APR for certain cards.
  • Potential to earn cash back rewards.
  • Some jewelers offer special financing options.


  • Intro APRs are time-limited.
  • Risk of high interest rates if balance isn’t paid before promotional period ends.
  • Potential down payment if financed through a jeweler.

3. Store Credit Card or Loan

Many jewelers offer store-specific credit cards. Ensure you understand the terms, especially post-promotion.


  • Low or 0% introductory interest rates.


  • Rates might skyrocket post-promotion; limited use to specific stores.

4. Buy Now, Pay Later (BNPL)

Some retailers offer BNPL financing, allowing a portion of the payment upfront and the rest in installments. It’s essential to understand the repayment terms and ensure timely payments.


  • Immediate purchase with partial upfront payment.
  • Potentially interest-free installments.
  • Platforms like Affirm, Klarna, and Afterpay offer retailer-specific loans.


  • Limited retailer choices.
  • Potential high APRs or late fees if terms aren’t met.

5. BNPL Lenders

If you’ve chosen a ring, check if the retailer collaborates with these lending platforms for convenient financing.


  • Offers from platforms like Affirm, Klarna, and Afterpay.
  • Some offer 0% APRs based on eligibility.
  • Consideration of factors beyond just credit scores.


  • Limited partnering retailers.
  • Risks of late fees or unexpectedly high APRs.

Financing an Engagement Ring with Poor Credit: What to Expect?

When considering financing with bad credit, your options might be limited based on the lender and the amount you seek. While some lenders may extend a loan offer, it might not cover your desired amount, while others could decline due to your credit history.

Engagement Ring Down Payments: How Do They Work?

The down payment for an engagement ring varies based on its price and the financing method chosen. With a personal loan, you might finance the ring’s entire cost and repay in installments. However, if you opt for jeweler-specific financing, they might request an upfront percentage.

Monthly Payments for an Engagement Ring: Is it Possible?

Yes, monthly payments are common. By availing a personal loan, you’ll commit to monthly installments until the debt clears. Similarly, with a store credit card, maintaining regular minimum payments ensures your account’s health.

The Typical Spend on Engagement Rings: What’s the Average?

While national statistics peg the average engagement ring cost at approximately $6,000, individual expenditure varies. The amount you allocate will hinge on your financial capacity, your partner’s preferences, and the jeweler’s pricing.

Final Thoughts

Before using a personal loan for an engagement ring, assess your finances, considering the pros and cons of such debt. Remember, the ring symbolizes love, not cost. Discuss with your partner to ensure shared financial goals and consider saving gradually for a more secure purchase.

Engagement Ring Financing FAQ

Should I borrow money for an engagement ring?

Borrowing money for an engagement ring depends on your financial situation and priorities. Consider the long-term implications of taking on debt, and weigh it against the symbolic value of the ring.

Should you finance an engagement ring or pay cash?

If you have the funds available, paying cash can save you from interest costs and monthly payments. However, if cash payment isn’t feasible, financing can be a viable option, provided you’re comfortable with the terms and can manage the repayments.

Who has the best financing options on engagement rings?

The best financing options vary based on individual needs and creditworthiness. Research and compare offers from traditional banks, credit unions, online lenders, and jeweler-specific financing.

Is $30,000 a lot for an engagement ring?

Whether $30,000 is considered “a lot” is subjective and depends on personal financial capacity and cultural or social expectations. It’s essential to spend within your means and prioritize the ring’s sentimental value.

Is $3,000 too little for an engagement ring?

The “right” amount to spend on an engagement ring varies for everyone. A $3,000 ring can be just as meaningful and beautiful as more expensive ones. It’s all about the significance and the choice of stone and setting.

What is a realistic amount to spend on an engagement ring?

A realistic amount is one that aligns with your budget without causing financial strain. Many factors, including income, savings, and personal preferences, play a role in this decision.

What is the three salary rule for engagement rings?

The three salary rule suggests that one should spend the equivalent of three months of their salary on an engagement ring. However, this is a traditional guideline and not a strict rule. It’s essential to choose a budget that feels right for your situation.

How much should I spend on an engagement ring if I make $100,000 a year?

Following the traditional 3-month salary rule, someone earning $100,000 might consider spending around $25,000. However, it’s crucial to adjust based on personal finances, savings, and preferences.

How many carats should an engagement ring be?

The carat size of an engagement ring depends on personal preferences, budget, and the significance attached to the ring. There’s no set standard; it’s all about what feels right for the couple.

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