One of the big steps you can take in a relationship is to get engaged to the love of your life. To take this line of action, you have to purchase an engagement ring. You may have spare cash or emergency funds to cater to this event. But what do you do if you don’t? We are about to find out in a bit. If you intend to purchase a diamond engagement ring or any other gemstone and ring band, it is ideal to do so with your money. Otherwise, you have to consider other options.
Why Should You Consider Engagement Ring Financing?
According to some financial experts, financing an engagement ring through private loans or credit cards is not advisable. And to an extent, they are right. Some of these loans and credit cards come with high interest rates that make it difficult to repay a loan. It is no surprise that some men still repay loans on their engagement rings three years into the marriage. The money used to finance these loans can go a long way in addressing other needs. So, there is a valid point about using these financial options.
However, there are credit cards that provide low or 0% intro purchase APRs. What does this mean and how is it beneficial? With this type of financing, also known as deferred financing, you can take a loan to purchase your engagement ring, and cover its cost under a specified loan term without paying interest. And some come with better deals as the loan term can be as much as 12 months, giving you more time to cover the engagement ring cost. That way, you don’t have to deal with high-interest rates. But if you fail to cover the loan before the loan term ends, the accrued interests will reflect on the loan balance, which you have to pay. So, be sure that you need this financing before contacting your lender.
Are there Other Options?
What if you don’t want credit cards and loans? You can take advantage of social financing as well. Peer-to-peer helps borrowers to source for funds directly from lenders who can set the interest rate for the loan. You will find this option on several loan sites. Borrowers with higher creditworthiness have access to loans with minimal interest as low as 5.99 cents. On the other hand, first-borrowers may have to pay up to 36% in interest.
If you intend to borrow from a financial institution, I recommend that you have a good relationship with them to help you procure a short-term loan with a fixed payment amount.
What Else Should I Know?
I would like to state at this point that you don’t have to empty your life savings or break a bank to propose to your would-be spouse. You can create a romantic in-door proposal under an ideal budget and not necessarily do that on an expensive vacation. In fact, according to American Express, 16% of couples do this, while 7% propose over a fancy meal. Additionally, 22% of couples are engaged while on vacation. You can have a decent engagement and still have more money to cater to other needs.