Financing engagement rings in 2023
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Valentine’s Day is just around the corner and so it’s engagement season. According to WeddingWire, Valentine’s Day is the top date for marriage proposals in the U.S., followed by New Year’s Day and Christmas.
On any given day, a good quality ring can set you back a few thousand dollars. However, buying an engagement ring in 2023 may be more challenging than usual. A Bankrate survey revealed that 46 percent of economists think high inflation will persist for 12-18 months more, making everything more expensive.
There are a handful of ways to finance your purchase to make it more manageable, such as applying for a payment plan with a jeweler or taking out a personal loan. That said, having a budget that closely aligns with your situation is key when ring shopping.
Financing engagement rings statistics
- The average amount Americans spend on an engagement ring is $6,000.
- Diamonds are the most popular stone when it comes to engagement rings, accounting for 86% of all rings purchased in 2021.
- Clear diamond engagement rings cost 63% more than gemstone rings, with an average price of $6,800 compared to $2,500.
- The average size of an engagement ring is 1.5 carats.
- Yellow gold engagement rings are rising in popularity, with an 11% increase since 2017.
- Although 80% of shoppers set a budget for their engagement ring, only 63% stick to it.
- Wedding bands for women are 50% more expensive than men’s, costing about $1,000 compared to $550.
- Eco-friendly, man-made stones are becoming increasingly popular, with 34% of Gen X, Millennials and Gen Z couples agreeing that having a natural stone isn’t as important.
- In 2021, 67% of buyers purchased an engagement ring in-person. Of those, 40% bought their rings at an independent retailer, while 26% bought them at a national or regional jewelry chain.
- Americans spend about $7,820 for their whole engagement. This includes the ring, photographer and both engagement and bridal parties.
Budgeting for engagement rings
There’s no rule that enforces you to get an engagement ring of a particular size, shape or setting. However, you might’ve heard the outdated rule of thumb that an engagement ring should be worth approximately three months of salary. Diamond jeweler De Beers popularized the antiquated idea of tying a ring’s price to your monthly earnings in its 1930s marketing campaign. Yet, couples still spend a significant amount of money on an engagement ring.
The Knot’s 2021 Jewelry & Engagement Study found that the average engagement ring price that consumers paid increased to $6,000, compared to $5,900 in 2019. Of the respondents, almost 30% said they went over their engagement ring budget.
Ring setting, metal type, diamond or gemstone details like rating and size, plus the region you live in will all impact the price of our engagement. Added to this, you’ll also need to factor in timing. For the last year, inflation has been red-hot, increasing our overall cost of living. According to economists, a high inflationary environment will likely rule what’s left of 2023, making buying a ring out of pocket increasingly more challenging.
Still, 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. This financing option is conveniently done in-store or through the jeweler’s online platform. It’s an installment loan wherein you get to walk out of the store, ring in hand, and 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. Some retailers might have financing requirements, like a minimum purchase amount, and offer various repayment terms.
Best for: Buyers who want a convenient financing source and those who might not have strong credit.
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% APR rewards credit card. In this scenario, you’re confident that you can repay the full cost of the ring within the short-term promo period. Choosing a rewards credit card at a zero-interest rate to pay off your engagement ring can result in paying no interest during your repayment 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.
Best for: Individuals who have strong credit or can repay the ring purchase in full by the next billing statement.
Another conventional option is taking out an engagement ring loan. Some lenders market this lending product specifically as an engagement ring or wedding loan. Similarly, some lenders simply refer to it as a personal loan in which you can use the loan funds toward any purchase, including an engagement ring.
Like jeweler financing, a personal loan is another type of installment loan. You’ll pay back the loan in smaller monthly installment payments over a set period, plus interest charges and fees. However, unlike jeweler financing, since the lender is a third party, you’ll 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 of third-party loans, however, is that you get to compare 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.
Best for: Buyers who have good credit and want to shop around for a competitive interest rate.
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 integrated into the online checkout process when buying an engagement ring online.
Generally, you’re required to pay a percentage (e.g. 25%) of the total purchase upfront. Then, you’re required to 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.
Best for: Online ring shoppers who want a seamless financing experience and the potential to pay no interest for a short repayment term.
Frequently asked questions
According to The Knot, the average cost of a wedding ring for women is $1,100, while the average cost of a wedding ring for men is $550. However, the cost can go up or down, depending on the quality, materials used and complexity of the design.Still, 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 $6,000 on their engagement ring, according to The Knot. However, this amount can fluctuate, depending on what both you and your partner want and what you can actually afford.Although you can take out a personal loan or use a credit card to finance your purchase, it’s always best to stay on a budget, as you don’t want to start your marriage with financial woes. 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.