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According to the 2020 Australian wedding industry report, an average couple spends $5,367 on their engagement ring. Whether you're planning on spending a lot less or a lot more, you may still be considering how you're going to come up with the money. Picking the right ring while sticking to your budget can be difficult, especially if you haven't saved up much in advance. If you are considering an engagement ring loan, it's important to consider all of your options.
You have a few options if you're looking into financing for an engagement ring. These include in-store financing, interest-free finance and personal loans. Here is what you need to know about financing an engagement ring.
If there were ever a day made for showing your partner just how much you love them, Valentine's Day would be it. And what better way to show your devotion to your partner than by buying an engagement ring and getting down on one knee and asking for their hand in marriage? That's why February 14 is one of the most popular days for couples to get engaged, and millennials seem to agree that it's the perfect day for proposals.
What with the endless supply of long-stemmed red roses, chocolate candies and sales on diamonds, it's no wonder that this love-filled holiday sees millions of couples getting engaged each year.
Sometimes your heart moves faster than your savings. If you don't have cash on hand to pay for an engagement ring, you can consider the following:
First and foremost, forget the "two-month salary" rule. It's a longstanding marketing ploy made up by established diamond company DeBeers. How much you are willing to spend on an engagement ring is completely and utterly up to you.
Diamondport's survey, which found that couple's spend an average of $5,297.50 (a close match to the Australian wedding industry report) on engagement rings, also noted that 4% of survey respondents spent over $20,000 on their engagement ring and 1.5% spent over $25,000. It also found that while there was a correlation between income and the cost of the ring (understandably), it wasn't a hard and fast rule.
There are only two things you need to consider when figuring out your engagement ring budget:
Your partner might have a specific style in mind and would prefer a less-expensive version of that than an extremely expensive ring in the wrong cut. Try to suss out their preferences before making a big purchase. Diamondport also found that both partners contribute to the cost of the ring 20% of the time, so this may be worth considering if you know that they have a preference that exceeds your budget.
No one goes into a marriage proposal thinking that their partner is going to say "no" but unfortunately it can happen. So what should you do if you took out a loan to pay for the ring?
First things first, you should try to return the engagement ring to the retailer you purchased it from. You'll need to reach out to whatever store or online retailer you bought your engagement ring from to get their specific return policy.
If you took out a loan to purchase the ring, things get a little trickier. Check if you will be charged early repayment fees before repaying your loan in full. If you will be charged these fees, such as additional or early repayment penalties, try giving your lender a call and seeing if these can be waived.
Some lenders charge a fee if you wish to repay your loan ahead of time. This may be for making too many additional repayments or for paying your loan off in full before the end of the loan term.
Some non-traditional lenders will let you use assets such as engagement rings as security for loans. Make sure you consider the cost of these loans as they tend to be more expensive than other traditional loan options as they are targeted at bad credit borrowers.
You may find restrictive loan terms, late fees or a high interest rate once the interest-free finance period comes to a close. Make sure you know the offer terms before you apply.
Adam Mathew is a writer for Finder, specialising in video games and TV. He's been the editor of magazines such as Ultimate Nintendo and Official PlayStation AU. His words may also be found in IGN, Gamespot, Kotaku, Red Bull, Game Informer and AusGamers.
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