Financing A Wedding Ring: Bad Credit, Good Options?

If you're looking to finance a wedding ring but have bad credit, there are still options available to you. While you may not qualify for some financing options, such as a zero-interest credit card, you could consider a buy now, pay later plan, in-store financing, or a personal loan.

Buy now, pay later plans are available at most retailers, including jewelry stores, and may be a good option for those with bad credit as lenders don't require a hard credit check. Personal loans for bad credit are another option, but be sure to consider whether you can afford the monthly payments, as interest rates may be high.

Additionally, some jewelers offer in-store financing options or payment plans with low-interest or no-interest promotional periods. However, if you still have a balance when the promotional period ends, you may be charged a high interest rate.

It's important to carefully consider the fees, interest rates, monthly payment amounts, and repayment terms associated with each financing option to ensure you can comfortably afford them.

Zero-interest credit cards

Promotional Periods

Credit Score Impact

When using a zero-interest credit card, it's important to consider the credit limit. If the cost of the ring exceeds 30% of your overall available credit, it could negatively impact your credit score. Additionally, failing to make payments on time can also hurt your credit score.

Qualification

To qualify for a zero-interest credit card, you typically need a good to excellent credit score (690 or higher). If your credit score is lower, you may not be eligible for these types of cards.

Alternative Options

If you have bad credit, there are alternative financing options available, such as "buy now, pay later" plans, personal loans for bad credit, or in-store financing. "Buy now, pay later" plans are available at most jewellery stores and may offer zero-interest instalments, even for those with fair or bad credit. Personal loans for bad credit are another option, but be sure to compare interest rates and ensure you can afford the monthly payments.

In summary, zero-interest credit cards can be a good option for financing an engagement ring if you have a good credit score, can qualify for a high credit limit, and are confident you can pay off the ring within the promotional period. However, if your credit score is less than ideal, there are other financing options available to help you purchase the ring of your dreams.

Buy now, pay later plans

If you have bad credit, you can still finance a wedding ring, though you may not qualify for some options like a zero-interest credit card.

• Fees: Additional fees may apply, especially for late payments or payments made with insufficient funds.
• Interest rate: Look for the lowest interest rate, and consider whether the rate is variable or fixed. Fixed rates won't change during your term, but variable rates may change over time, increasing your overall repayment amount.
• Monthly payment amount: Ensure that you can comfortably afford the monthly payments by reviewing your budget.
• Repayment term: A short repayment term could put pressure on your budget, while a longer term could increase your overall costs if the interest rate is high.
• Affirm: Affirm offers payment plans with interest rates from 0-31.99% APR, with options for monthly payments between 3, 6, 12, 24, or 36 months. You can apply for Affirm online by providing basic information, and they perform a soft credit check that won't affect your credit score.
• ShopEZCredit: ShopEZCredit offers buy now, pay later bridal sets with instalments as low as $59.00 per payment. You will need to make a down payment, and you can submit an online application to learn more about their payment plans.
• Spence Diamonds: Spence Diamonds offers flexible financing plans in partnership with Affirm, Fairstone, and Flexiti. With approved credit, you can choose from various options, including no payments for 6, 12, or 18 months or a monthly payment plan.

Remember to consider all the factors and choose a plan that best fits your financial situation.

In-store financing

Gage Diamonds, for example, offers financing to shoppers with poor or no credit. Their financing partner, LendFirm, is an online lender that works with exclusive merchants. LendFirm offers interest rates as low as 4.95% for 12 or 24 months on all pieces, from engagement rings to other fine jewellery. When you shop with Gage Diamonds, you need to provide a valid driver's license or state ID, proof of a direct deposit from your primary employer/benefit provider into a three-month-old checking account, and a record of a checking account in good standing. Applications are typically approved within 24 hours, with no upfront costs.

Another example is American First Finance, which offers engagement ring financing with bad credit. They note that most financial institutions and credit unions consider buyers with bad credit as high-risk borrowers and often decline to offer them loans. However, bad credit financing for an engagement ring is a payment plan for people with bad credit to purchase high-quality rings. You can apply for engagement ring financing from several financial institutions online.

It's important to note that no credit check financing options are available, where credit will not be checked when applying. However, with traditional financing options, having a bad credit history or a low credit score may prevent your application from being approved. No credit needed financing may be a better option if you need financing without a pristine credit history. Your credit will be checked, but the financing process does not solely depend on your credit score for approval.

Personal loans

You can use a personal loan calculator to see estimated rates and payments on engagement ring loans based on your credit score. Pre-qualifying will allow you to see personalized rates and terms without affecting your credit score.

If you have bad credit, you can still get a personal loan, but you may pay higher interest rates. Bad credit personal loans are available, but these options are limited and may include additional fees, and the approval time may be longer.

Improving your credit score

Make On-Time Payments

Payment history accounts for 35% of your FICO score and is the most important factor in credit scoring. Always make payments on time to improve your credit score. If you're having trouble, set up autopay for at least the minimum amount and create calendar reminders and alerts. You can also register for Experian Boost to get credit for eligible rent, utilities, cellphone, insurance, and streaming subscription payments.

Pay Down Revolving Account Balances

The amount you owe makes up 30% of your FICO score. Your credit utilization rate, or the percentage of available credit used on revolving credit accounts like credit cards, is a significant factor. Aim for a utilization rate below 30%, but the lower, the better. If you have high credit card balances, make paying them off a priority. Consider debt consolidation loans, balance transfer credit cards, debt management plans, or debt repayment strategies.

Don't Close Your Oldest Account

The length of your credit history accounts for 15% of your FICO score and is influenced by the age of your oldest account and the average age of all your accounts. Avoid closing your oldest credit card, even if you no longer use it. Instead, consider using it occasionally or putting a small recurring bill on autopay to keep it active. If the card no longer suits your needs, ask the card issuer if you can upgrade or downgrade to a more suitable option.

Diversify the Types of Credit You Have

Your credit mix accounts for 10% of your FICO score. It involves managing different types of credit, such as credit cards, auto loans, and mortgage loans. Your credit mix will likely improve over time as you apply for different types of credit to meet your financial needs. If you're just starting, consider a starter credit card and a credit-builder loan. Avoid taking on unnecessary debt just for building credit.

Limit New Credit Applications

Each time you apply for credit, the lender performs a hard inquiry on your credit report, which can knock a few points off your score. Only apply for credit when necessary, and check if the lender offers prequalification, which uses a soft credit check that won't impact your score.

Dispute Inaccurate Information on Your Credit Report

Inaccurate information on your credit report can significantly impact your score. Dispute any errors or fraudulent information with the credit reporting agencies (Experian, Equifax, and TransUnion). Request your free credit reports and review them for discrepancies. If you find any, follow the dispute process to have them corrected or removed.

Become an Authorized User

If you're new to credit or rebuilding your score, consider asking a loved one to add you as an authorized user on their credit card. Ensure the account has a positive payment history and a low credit utilization rate. Being an authorized user can positively impact your score, especially if the account has a long history and is well-managed.

Frequently asked questions