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- In-house financing, credit cards, personal loans and point-of-sale financing are common ways to fund engagement rings.
- Features like the setting, material and stone influence the cost of the ring.
- The average engagement ring costs less than $6,000 — but it can be more expensive if you choose more luxurious options.
There are a handful of ways to finance your engagement ring purchase to make it more manageable, such as applying for a payment plan with a jeweler or taking out a personal loan. On any given day, a good quality ring can set you back a few thousand dollars — and buying an engagement ring in 2024 may be more challenging than usual.
A Bankrate survey showed that while inflation is down, many economists don’t believe it will hit the Fed’s target until 2025. That said, having a budget that closely aligns with your situation is key when ring shopping.
Financing engagement rings statistics
- The average amount Americans spent on an engagement ring in 2023 was $5,500, according to The Knot.
- The most popular price range for wedding bands runs from $700 to $1,200, according to information from Brides.
- Americans spent about $7,820 for their whole engagement in 2020. This includes the ring, photographer and both engagement and bridal parties.
- Diamonds are still the most popular stone when it comes to engagement rings, accounting for 85% of all rings purchased in 2023.
- Lab-grown diamonds are a popular trend — largely because they can cost 50 to 70 percent less than natural diamonds.
- The average size of an engagement ring is one carat.
- Yellow gold engagement rings are rising in popularity, with a 26% increase since 2015 — but white gold still remains the most popular in 2023.
Budgeting for engagement rings
You might have heard the outdated rule of thumb that an engagement ring should be worth approximately three months of salary. Diamond jeweler De Beers popularized the idea of tying a ring’s price to your monthly earnings in its 1930s marketing campaign. An engagement ring doesn’t have to add up to that much money, but you should still be prepared to spend at least a grand on the purchase.
The Knot’s 2023 Jewelry & Engagement Study found that the average engagement ring price that consumers paid was $5,500 — down from $6,000 in 2021. Ring setting, metal type and diamond or gemstone details — like rating and size — will all impact the price of your engagement ring.
Because of the high cost, there are a few options you can explore if you need to finance the purchase of your ring.
Jewelry store financing
Many major jewelry retailers offer in-house financing to help their customers pay for an engagement ring. These take the form of an installment loan — you make incremental monthly payments toward the loan balance, plus interest.
Generally, jewelry financing offers more flexible credit requirements compared to borrowing a loan from a traditional bank. Terms will vary by retailer, as will financing requirements, like a minimum purchase amount.
If you want a convenient financing source and don’t have strong credit, you may want to check out in-store financing.
Using a credit card to finance an engagement ring can be a strategic option for responsible borrowers.
For example, let’s say you have strong credit and qualify for a promotional 18-month 0 percent APR rewards credit card. If you can pay off your card before the promo period ends, it can result in paying no interest while also earning rewards points or miles.
If your credit doesn’t qualify for a promotional rate offer, be aware that credit card interest can be steep. When using a credit card without a no-interest promotion, calculate whether you have the budget to pay off the ring within the next billing cycle.
Individuals who have strong credit and can qualify for a low- or no-interest period or can repay the ring purchase by the next billing statement may be able to get a good deal with a credit card.
Like jeweler financing, a personal loan is a type of installment loan. However, unlike jeweler financing, since the lender is a third party, you have to get approved for the loan before shopping for your ideal ring.
Eligibility for an unsecured personal loan varies between lenders, which includes credit requirements for approval. The advantage is comparing rates from multiple lenders to find the lowest option — even if you have less-than-perfect credit. That said, if you’d like to secure the best offer, make sure to boost your credit score by lowering high-interest debt, among other things, before you apply.
Buyers who have good credit and want to shop around for a competitive interest rate may want to take advantage of a personal loan to finance their engagement ring.
Buy now, pay later loan
Buy now, pay later (BNPL) loans, also called “point-of-sale financing,” have gained popularity in recent years. BNPL services, like Affirm, Klarna and Afterpay are often integrated into the checkout process when buying an engagement ring online.
Generally, you pay a percentage of the total cost upfront. Then you make equal payments over a short period to repay the remaining balance. Depending on the repayment term you choose or your credit, you might be offered a BNPL loan at no interest.
If you’re shopping online and want a seamless financing experience with the potential to pay no interest for a short repayment term, BNPL may be a good choice.
Frequently asked questions
Applying for any type of financing can lower your credit score for a few months. However, you can shop for lenders that offer prequalification to preview your rates without impacting your credit. Once you apply and undergo a hard credit check, you will see a small drop in your score.
Wedding bands usually cost less than engagement rings. According to Brides, they start around $700 for the most popular types.
There is no perfect number when it comes to a wedding ring price. How much you should spend will be based on what you can comfortably afford without compromising other priorities, such as saving money for a house.
The average American spends about $5,500 on their engagement ring. That’s an average — some people spend much more, and some spend much less. If you’re curious about how much you should spend, consider using an engagement ring calculator, as this could give you a better idea of what’s attainable.