5 Tips That Could Save You Hundreds on an Engagement Ring

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how to pay for an engagement ring

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If you’re getting ready to shop for an engagement ring, you might be overwhelmed trying to figure out which cut, color, clarity, and carat to buy. Not to mention the biggest worry: the cost.

Knowing how to pay for an engagement ring is also about careful planning. The average person spends $5,978 on an engagement ring, according to The Knot.

Finding and buying the right ring is one of the bigger purchases you’ll make, aside from your wedding, of course. Here’s how to do it right.

How to afford an engagement ring

Although the average cost approaches $6,000, you might not have to wonder how to afford an engagement ring. Consider that 55 percent of adults think spending less than $3,000 is a wiser choice, according to a 2016 GOBankingRates survey.

The truth is that every couple is different. Knowing my potential to go overboard, my girlfriend held me to a $500 budget, for example. Your partner might trust your judgment to choose a rock at any price.

But few people still follow the two months’ salary rule popularized by De Beers in 1980s marketing campaigns. With that in mind, here’s a five-step plan before you drop a knee.

1. Decide on the type of ring

Past the point of learning your partner’s fit and design preferences, you’ll need to decide on the band and the stone’s size, shape, and setting.

Dropped hints and the help of friends can go a long way. They could give you enough of a head start to browse for price ranges online.

Along the way, you’ll discover ways to lower your range, if necessary. To stay close to $500, for example, I swapped a sapphire into the setting of my fiance’s ring, including tinier diamonds on the sides.

If you’re looking for a diamond ring but need to cut a corner, lowering the carat size even by a tenth can offer big savings. Jewelers have price jumps for round numbers, like 1.25, 1.5, and 2 carats. You could look at the other Cs — cut, color, and clarity — for sacrifices, if necessary.

Go into the process with an open mind. Don’t rule out customized or antique rings, which could prove to be cheaper than they sound.

2. Start saving up

It’s also important to shop for a ring with a specific budget in mind. Your eyes might get bigger when you see a ring just beyond your price range, but it’s important to remember that you can find something similar at a lower cost.

Say your partner’s desired ring type falls into the $1,500 range. Coming up with that cash via a loan might seem tempting. But before resorting to a personal loan, treat the future debt as a mid- or long-term savings goal. Knowing how to save for an engagement ring is partly about knowing your timeline. Proposals shouldn’t be rushed anyway.

If you’re not planning to propose for months, for example, you could set aside a little bit from each paycheck to build your ring fund. It might take up to six weeks for ordered rings to arrive anyway.

Consider the right savings vehicle, too. Keeping your ring fund in your basic checking account, for example, would earn you little or no interest. Putting it in a high-yield savings or checking account, on the other hand, could net you up to 1.00% APR or higher.

If you take even more time to pop the question, you could stash existing savings in a one- or two-year certificate of deposit (CD) that would guarantee a specific rate of return. Your money wouldn’t be accessible without penalty, but it would be safe from stock market risk until you need to withdraw it.

As you approach the big day, also try to line up your shopping with store or holiday sales, such as those occurring during Valentine’s Day weekend. You could lower your spending even more.

3. Shop online and off

Once you know how to save for an engagement ring, shop for a ring the way you would shop for other big purchases. Compare pricing online and in store, ask for advice from friends, and research sellers.

Shopping online allows you to compare rings from multiple retailers. Whether you’re looking on Etsy or the websites of small boutiques or large chains, consider the pros and cons of buying online and in person:

  • Online: You won’t get to physically hold the ring, but there are some advantages, such as potentially avoiding sales tax. You could also opt to buy a discounted stone online, though you’ll have to match it with a setting elsewhere.
  • In person: You might be looking at a smaller inventory, but you can take your time, ask questions, and even bring along a friend for advice. Creating a relationship with a jeweler also gets you perks like free cleanings.

You could always shop both in person and online until you find the best deal. In my case, I chose to buy a ring online from a jeweler that was within driving distance. That way, we could head straight there if something was amiss with the ring.

No matter where you shop, make sure the jewelers have some credentials. They can be members of Jewelers of America or the Gemological Institute of America (GIA), for example. They should present GIA certificates for diamonds. You might also review the jeweler’s reviews via the Better Business Bureau.

4. Review contingency plans

Knowing how to pay for an engagement ring should include knowing how to replace one. Say your partner wants to exchange the ring. Or maybe the ring becomes damaged or stolen.

These scenarios can be planned before the fact but not after. As you’re zeroing in on that perfect ring, you’ll want to ask the jeweler about its return and exchange policies, warranties, and insurance options.

National jewelers provide this information on their website. Brilliant Earth, for example, offers 30-day returns and a lifetime warranty. It also allows you to buy an engagement ring with a temporary setting that can be replaced after your partner says, “Yes.”

You might have to go looking or asking for these sorts of guidelines at smaller shops.

Also, consider that your ring choice might affect your ability to bring it back to the store. You typically won’t be able to return or even exchange a ring that was custom designed or engraved, for example.

As for protecting your purchase, ask your insurance provider about including the ring’s value on your existing homeowners or renter’s policy. You could also look into specialty insurance options. Your costs and coverage would depend on the value of your ring and where you live.

5. Pick the right payment method

If you did the dirty work of budgeting at the start, you’ve reached the easy part of the ring-buying process. But you might be wondering about how to pay for an engagement ring beyond handing over cash or swiping your debit card.

For example, paying with a credit card could net you rewards or greater protection for online purchases. It’s not a bad idea as long as you saved up to clear your card’s balance soon after the transaction.

You might also be tempted to use an in-store financing option.

A jeweler could extend you a line of credit that charges no interest as long as you make your monthly payments on time. Missing a payment, however, could result in interest charges surging above 20 percent. You should be wary of national chains’ store credit cards for the same reason.

Using cash is your safest bet. It ensures you won’t take on debt, and many jewelers will offer an in-store discount for paying in full on the day of the purchase. If they don’t volunteer this price reduction, start negotiating.

Keeping the ring a secret

Now that you know how to pay for an engagement ring, you’ll just have to pay for it in a way that lets you keep it a secret.

If you combined finances before getting married, you might have to disguise the charge on your bank statement. Also, if you buy the ring online, consider shipping it to your office or a friend’s place. That will stop your partner from finding a very interesting box on the doorstep.

Setting a budget, saving up, and shopping around isn’t fun for everyone. But these steps will help ensure that you find the right ring for the right price.

Interested in a personal loan?

Here are the top personal loan lenders of 2018!
LenderAPR RangeLoan Amount 
1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Personal Loans: Fixed rates from 6.990% APR to 14.865% APR (with AutoPay). Variable rates from 6.255% APR to 12.555% APR (with AutoPay). SoFi rate ranges are current as of September 1, 2018 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 6.255% APR assumes current index rate derived from the 1-month LIBOR of 2.08% plus 4.425% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

    To check the rates and terms you qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull.See Consumer Licenses.
  2. Minimum Credit Score: Not all applicants who meet SoFi’s minimum credit score requirements are approved for a personal loan. In addition to meeting SoFi’s minimum eligibility criteria, applicants must also meet other credit and underwriting requirements to qualify.
  3. SoFi Personal Loans are not available to residents of MS. Maximum interest rate on loans for residents of AK and WY is 9.99% APR, for residents of IL with loans over $40,000 is 8.99% APR, for residents of TX is 9.99% APR on terms greater than 5 years, for residents of CO, CT, HI, VA, SC is 11.99% APR, and for residents of ME is 12.24% APR. Personal loans not available to residents of MI who already have a student loan with SoFi. Personal Loans minimum loan amount is $5,000. Residents of AZ, MA, and NH have a minimum loan amount of $10,001. Residents of KY have a minimum loan amount of $15,001. Residents of PA have a minimum loan amount of $25,001. Variable rates not available to residents of AK, TX, VA, WY, or for residents of IL for loans greater than $40,000.
  4. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

2 Includes AutoPay discount. Important Disclosures for Payoff.

Payoff Disclosures

  1. All loans are subject to credit review and approval. Your actual rate depends upon credit score, loan amount, loan term, credit usage and history. Currently loans are not offered in: MA, MS, NE, NV, OH, and WV.

3 Important Disclosures for FreedomPlus.

FreedomPlus Disclosures

  1. All loans available through FreedomPlus.com are made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. All loan and rate terms are subject to eligibility restrictions, application review, credit score, loan amount, loan term, lender approval, and credit usage and history. Eligibility for a loan is not guaranteed. Loans are not available to residents of all states – please call a FreedomPlus representative for further details. The following limitations, in addition to others, shall apply: FreedomPlus does not arrange loans in: (i) Arizona under $10,500; (ii) Massachusetts under $6,500, (iii) Ohio under $5,500, and (iv) Georgia under $3,500. Repayment periods range from 24 to 60 months. The range of APRs on loans made available through FreedomPlus is 4.99% to a maximum of 29.99%. APR. The APR calculation includes all applicable fees, including the loan origination fee. For Example, a four year $20,000 loan with an interest rate of 15.49% and corresponding APR of 18.34% would have an estimated monthly payment of $561.60 and a total cost payable of $7,948.13. To qualify for a 4.99% APR loan, a borrower will need excellent credit on a loan of $15,000 with a term of 24 months, and qualify for at least two of the following discounts: (1) add a co-borrower who has sufficient income; (2) use at least fifty percent of the loan proceeds to directly pay off existing debt; or (3) show proof of having at least forty-thousand dollars in retirement savings – contact FreedomPlus for further details.

4 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Personal Loan Rate DisclosureFixed interest rates from 6.49% – 19.49% (6.49% – 19.49% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  3. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.

5 Important Disclosures for LendingPoint.

LendingPoint Disclosures

  • Loan approval is not guaranteed. Actual loan offers and loan amounts, terms and annual percentage rates (“APR”) may vary based upon LendingPoint’s proprietary scoring and underwriting system’s review of your credit, financial condition, other factors, and supporting documents or information you provide. Origination or other fees from 0% to 6% may apply depending upon your state of residence. Upon LendingPoint’s final underwriting approval to fund a loan, said funds are often sent via ACH the next non-holiday business day. LendingPoint makes loan offers from $2,000 to $25,000, at rates ranging from a low of 15.49% APR to a high of 34.49% APR, with terms from 24 to 48 months. The loan offer(s) shown reflect a 28 day payment cycle which is being offered as a courtesy as many of our customers are paid on a biweekly schedule and thus this may better align the loan payment dates with your actual income receipt schedule.

6 Important Disclosures for LendingClub.

LendingClub Disclosures

All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.95% to 35.89%*. The origination fee ranges from 1% to 6% of the original principal balance and is deducted from your loan proceeds. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at the time of application. The average origination fee is 5.49% as of Q1 2017. In Georgia, the minimum loan amount is $3,025. In Massachusetts, the minimum loan amount is $6,025 if your APR is greater than 12%. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months. Borrower must be a U.S. citizen, permanent resident or be in the United States on a valid long term visa and at least 18 years old. Valid bank account and Social Security number are required. Equal Housing Lender. All loans are subject to credit approval. LendingClub’s physical address is: LendingClub, 71 Stevenson Street, Suite 1000, San Francisco, CA 94105.

†Per reviews collected and authenticated by Bazaarvoice in compliance with the Bazaarvoice Authentication Requirements, supported by anti-fraud technology and human analysis. All reviews can be reviewed at reviews.lendingclub.com

**Based on approximately 60% of borrowers who received offers through LendingClub’s marketing partners between January 1, 2018 to July 20,2018. The time it will take to fund your loan may vary.

7 Important Disclosures for Earnest.

Earnest Disclosures

  1. Earnest does not lend in Alabama, Delaware, Kentucky, Nevada, or Rhode Island.

8 Important Disclosures for Avant.

Avant Disclosures

* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.

** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33

* Important Disclosures for Upgrade Bank.

Upgrade Bank Disclosures

* Your loan terms are not guaranteed and are subject to our verification and review process. You may be asked to provide additional documents to enable us to verify your income and your identity. This rate includes an Autopay APR reduction of 0.5%. By enrolling in Autopay your payments will be automatically deducted from you bank account. Selecting Autopay is optional. Annual Percentage Rate is inclusive of a loan origination fee, which is deducted from the loan proceeds. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. All loans made by WebBank, member FDIC. Please refer to Upgrade’s Terms of Use and Borrower Agreement for all terms, conditions and requirements.

** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.

7.73% – 29.99%$1,000 - $50,000

Visit Upstart

6.26% – 14.87%1$5,000 - $100,000

Visit SoFi

6.99% – 35.97%*$1,000 - $50,000

Visit Upgrade

5.99% – 24.99%2$5,000 - $35,000

Visit Payoff

4.99% – 29.99%3$10,000 - $35,000

Visit FreedomPlus

5.99% – 18.99%4$5,000 - $50,000

Visit Citizens

15.49% – 34.49%5$2,000 - $25,000

Visit LendingPoint

6.95% – 35.89%6$1,000 - $40,000

Visit LendingClub

6.99% – 18.24%7$5,000 - $75,000

Visit Earnest

9.95% – 35.99%8$2,000 - $35,000

Visit Avant

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.