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How to pay off an engagement ring

Second only to actually getting married, buying an engagement ring is one of the biggest steps you will ever take. It's a big deal, which makes it all right to dip into your savings when the time comes... or does it?

Let's start off by making this quite clear: It is never ever the right time to dip into your savings. Of course, if you have the cash lying around, that is the ideal way to buy an engagement ring. However, if you are just a mere mortal like the rest of us, you probably don't have that kind of money lying around. If you need to buy an engagement ring, but it is not financially viable for you to do so at the moment, a loan could be your best option. Here are some alternatives to buying an engagement ring in cash.

What on earth is social financing?

If traditional financing is proving to be a headache, you could investigate peer-to-peer lending. There are many websites that connect potential borrowers to investors. Those who are looking for a loan, can fill in their details on an online form, which will cover a basic information as well as what they desire from a loan. This information then goes up for review by would-be investors. Depending on the supplier you choose, some financial services might allow the investor to set the interest rates that they would be after if they were to lend money. Unfortunately these rates tend to be quite high.

Deferred financing didn't work for me - what do I do?

Deferred financing generally comes with a 12-month window, and which time you will be able to pay it off with 0% interest rate. But that's the catch - only if you are able to pay it off within the twelve months, will the 0% interest rate be applicable. Too short and unattainable for your personal situation? Perhaps you could look at a personal loan. These loans tend to last between three to five years, and generally have interest rates just above 10%, without a 0% promotional period. Expensive because they are not secured, and you will be liable to start paying the interest immediately. If you don't have a good credit score, a personal loan could be a poor choice of finance. Those with a low credit score can pay up to and over 20% interest. All is however not lost - if you have a decent work and credit score you could be in line for favorable rates, so speak to your lender.

Take action

One final consideration is to take out a credit card. Many credit card institutions is there a bonus when you sign up with the company, so if you spend a certain amount within the first few months, you could look forward to benefits like reduced interest rates. Given the cost of a standard engagement ring, you can probably cover the minimum spending requirement in one purchase.

If finance has been secured, and you have the ring in hand, the most difficult part that remains is strategizing how to ask the question!