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Diamonds are a girl’s best friend, as the song goes, but they can feel like your worst enemy if you’re hoping to afford an engagement ring.
The average diamond engagement ring will set you back about $5,000. Therefore, it’s smart to carefully consider how you’re going to pay for it well before you pop the question. But is a personal loan a good option for financing the bling? Maybe.
Should you get a personal loan for an engagement ring?
Let’s take a look at a few different scenarios.
- Do you have enough cash stashed to cover the cost of an engagement ring? Then you should go that route instead of taking out a loan or paying for a ring any other way.
- If a no-interest arrangement is available from the jeweler, that’s also better than getting a personal loan.
- If you’re committed to paying off your credit card balance all at once or you have a no-interest option with one of your cards, those outweigh taking out a personal loan, since they enable you to steer clear of interest charges.
If for some reason none of those scenarios works out, then a personal loan might make sense. However, make sure you shop around for the best interest rate and you figure out how much it’ll cost over time — with interest charges added — to finance the ring.
Remember, you have payment options
Jeff Moriarty, marketing manager at Crown Point, Indiana, jeweler Moriarty’s Gem Art, says customers turn to a variety of methods to pay for an engagement ring.
In many cases, customers at Moriarty’s take advantage of the store’s six-month, no-interest financing. “We have never had issues with customers paying this way,” Moriarty says.
The jeweler also offers a layaway plan, allowing someone to make scheduled payments over an extended period. “We see this most often when customers don’t plan on popping the question for quite some time,” Moriarty says.
In the case of credit cards, it’s common to see someone put a ring purchase on a card when he or she is trying to rack up spending to earn some sort of bonus (like airline miles) from the card issuer, Moriarty says. Of course, as he notes, this payment alternative works best only if you pay off the balance all at once to avoid interest changes.
Don’t be married to debt
Dan Moran, owner of Los Angeles jeweler Concierge Diamonds Inc., says that no matter how you pay for a ring, you shouldn’t go into debt to buy it.
“There’s a lot of misinformation on the internet about how much you should or shouldn’t spend, and it’s my job to set the record straight,” Moran says. “It’s long been thought that you want to spend two months’ salary on an engagement ring. This is bad advice.”
“An engagement ring is a symbol of your commitment, and it should be enough of an expense to make you think twice, but it should not become a burden or a source of stress,” he adds. “You don’t want to spend too much on the ring and then resent it later. That’s a bad way to start out any new marriage!”
Here are four other tips from Moran about engagement-ring shopping:
1. Focus on the cut of the diamond, rather than the clarity.
“As long as a diamond is clean to the naked eye, why would you spend more?” Moran says. “You will more than likely never look at your diamond under a jeweler’s loupe again after you purchase it.”
However, never skimp on the cut of a diamond, he says.
“A diamond’s only job is to sparkle,” Moran says, “and it’s the cut of the diamond that does that.”
2. Pay attention to the metal.
You can save money by reviewing the variety of metals available, according to Moran.
“There are many metal options that vary greatly in price,” he says. “White gold is less expensive than platinum, and rose gold is a popular choice right now. Consider the different options available to you in order to save on your overall costs.”
3. Try a diamond dealer.
When you shop at a retail store, you’re not only paying for the ring, but also for staff, rent, advertising and other overhead items, Moran says. Working directly with a diamond dealer cuts out the retail middleman — and can cut the cost of the ring.
4. Look into a custom ring.
When you buy a ring right out of the case at a jewelry store, you might wind up paying for design elements and other add-ons that you might not care about, Moran says.
“Designing a custom ring not only ensures that you have a one-of-a-kind design unique for your future spouse, but that you’re not paying for extras you do not want,” he says.