Debt-Free Engagement Ring Purchase
Not only is an engagement ring a huge step, but it’s also a huge purchase.It’s possible you have enough cash available to purchase the ring, it’s also possible that you don't. You can’t argue with the fact that purchasing an engagement ring is best when done with cash. If this isn’t an option for you at this moment, then what financing options do you have?
There are plenty of personal finance experts that will tell you that you shouldn’t get a loan under any circumstance. I agree with this wholeheartedly, but I know it’s not going to help you. You want to buy a great engagement ring and paying with cash isn’t an option, but a loan may be. Check out what I came up with as alternatives to see if any of them fit your financial plan.
If you can’t make the 12-month deferred ring financing work because it’s too short and you don't believe the 0% interest rates on purchases with a credit card it favorable, then a personal loan is your next option. Personal loans generally last 3-years with interest rates that range from low to high teens, depending on what you have going on with your credit score and financial history. They are pricey because they are unsecured and without a promotional period, you are paying interest rates right off the bat. You will also need a decently good credit score and history. If you don’t have a good score and history, this won’t be a good option because you will end up with an interest rate of over 20%. If your score is good, you will get some decent rates.
Interest rates will vary with personal loans. If you don’t have the best relationship with your financial institution, a short-term loan with fixed payments over a certain amount of time can save you from the hassle of retailer financing.
Peer-to-peer lending has become increasingly popular over the years. This is something you could consider if you can’t make traditional financing work for you. There are many websites that can connect you to investors. Those who are looking for a loan will have to complete their profile with some basic information and how much they want. All of this information is posted for review by a possible investor. There are also certain services that will allow the investors to set specific interest rates they want their borrowers to pay. These will generally begin at 5.99% for the best borrowers, but they can also reach upwards of 36% for those who are borrowing for the first time.
Are You Ready?
I already said that a credit card may not be a good option for you, but if you see one that you qualify for that has a great sign-up bonus, you should go for it. The bonus applies to when you spend a certain amount of money within the first few money. You can save a few hundred dollars by getting it as a gift card or cashback on the purchase in this uncommon way.
Just remember that your proposal doesn’t have to be as expensive as you think. About 22% of couples are more likely to propose while on vacation. American Express found that 16% of people set up a romantic proposal at home and 7% of people did it over a nice meal. Stay in, save money, and use it to pay off some of the ring cost before the interest rate kicks in. Once you’ve acquired financing and have the ring ready, now you get to figure out exactly how to propose.