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When you’re shopping for an engagement ring, it’s important to consider all of your financing options. There are a variety of ways to finance an engagement ring, and the best option for you will depend on your individual circumstances. One popular option for financing an engagement ring is through a personal loan. Personal loans can be a good option if you can’t pay for your ring outright. It helps you spread the cost of your engagement ring in instalments. If you’re looking for reliable engagement ring finance, talk to our brokers at Break Free Home Loans in Melbourne. We can help you compare the best engagement ring loans Melbourne has to offer from a wide range of lenders and find the right option for your needs.
What Is An Engagement Ring Finance
Engagement ring finance is a type of loan that allows you to finance the purchase of an engagement ring. This can be a helpful option if you don’t have the cash on hand to pay for the ring outright. With this type of loan, you’ll usually make monthly payments until the loan is paid off.
Benefits & Drawbacks
One of the main benefits of engagement ring finance is that it can help you stay within your budget. By spreading the cost of the ring over a period of time, you can make smaller monthly payments instead of one large lump sum. This can make it easier to afford an engagement ring that you may not have been able to purchase outright.
Another benefit of ring finance is that it can give you flexibility when it comes to choosing an engagement ring. If you have your heart set on a particular ring but it is outside of your budget, financing can help you make it happen. There are a variety of repayment plans available, so you can find one that fits your needs.
If you are considering engagement ring finance in Melbourne, there are a few things to keep in mind. First, be sure to shop around and compare interest rates and repayment terms. Second, make sure you understand all of the fees associated with the loan. And third, consider whether you would like to add insurance to the loan in case something happens to the ring.
The following are some benefits of engagement ring loans:
- You can often get a lower interest rate than you would with a personal loan.
- You may be able to make smaller monthly payments.
- Some lenders offer flexible repayment terms.
Meanwhile, these are the common drawbacks of engagement ring finance:
- You may end up paying more for the ring in the long run due to interest charges.
- If you default on the loan, you could lose the ring.
- Some lenders may require that you purchase insurance for the ring, which can add to the overall cost.
How Much To Spend On An Engagement Ring?
How much should you spend on an engagement ring? There is no “correct” answer to this question – it depends on your personal circumstances and budget. However, as a general guide, most people believe that you should spend between two and three months’ salary on an engagement ring.
If you are considering finance for your engagement ring, there are a few things to bear in mind. Firstly, you will need to have a good credit rating in order to be approved for finance. Secondly, there may be fees and charges associated with taking out a loan – so make sure you understand all the costs involved before making a decision.
The main benefit of ring finance is that it allows you to purchase a more expensive ring than you might otherwise be able to afford. However, it is important to remember that you will be taking on additional debt in order to do so. As such, you should only consider finance if you are confident that you will be able to comfortably make the repayments.
Engagement Ring Finance Options
Personal Loans
Secured
A secured loan requires collateral as security. This can be your home equity, a vehicle, or other valuable possessions. They generally offer lower interest rates than unsecured loans because they are seen as less risky. They allow you to borrow up to $100,000 with interest.
Unsecured
An unsecured loan allows you to borrow from $1,000 up to $50,000. Interest and fees apply. They do not require you to put down assets or collateral as security for the loan.
Credit Card
Interest-Free Finance
Some providers such as Zip, Affirm, Afterpay, PayPal, or Klarna may allow you to buy now and pay interest-free in instalments. This period may be short, ranging up to 8 weeks. While this is a convenient option, you need to consider whether you can repay the loan within the interest-free period. Late fees will apply if you can’t make your repayments on time.
In-Store Finance
How To Apply For The Loan
- Work out the type of finance you need. This includes how much you need to borrow and what you can reasonably afford to pay.
- Compare lenders and loan products. When considering engagement ring finance, be sure to compare interest rates, fees, and repayment terms before making a decision.
- Pre-qualify for a loan. This means passing a soft credit check from a lender. When you have the pre-approval for your chosen loan product, you are more likely to satisfy the eligibility requirements and get unconditional approval.
- Provide required documentation and lodge your loan application. You can do this with a qualified broker to ensure a seamless and successful approval. It’s important to organize and submit your complete information to make the application process easier.
- Get your loan approval and have the loan amount deposited into your nominated bank account. You will need to manage your repayment schedule and keep track of your payments. It’s important to stay on top of your repayments and meet your loan obligations.
How To Finance An Engagement Ring With Bad Credit
What if you don’t have the excellent credit needed to qualify for a personal loan? It is possible to obtain an engagement ring loan with less than ideal credit. In fact, some lenders specifically offer bad credit loans for engagement rings. This type of loan allows you to finance your engagement ring without meeting the standard lending requirements of most personal loans. Keep in mind that these loans tend to come with higher interest rates compared to not bad credit loans because they are categorized as higher-risk financing by lenders.
A tip when you have less than ideal credit is to apply with a cosigner. You can improve your chances of qualifying for a loan with a lower interest rate by having a creditworthy cosigner. Another option is to improve your own credit score. If you can afford to wait before taking out a personal loan, you can spend this time improving your credit to qualify for better interest rates. You can do this by making on-time payments for your bills, paying off credit card balances or becoming an authorised user on someone else’s credit card account.
Things To Avoid When Applying For A Loan
Taking The First Loan You See
It’s a bad idea to apply for the first loan you see. If you don’t shop around and check different lenders, you may be missing out on a better deal. If you want the best offer, you can’t apply for the first loan you find. Compare your options thoroughly and create a shortlist to see which loan benefits you most based on its cost, terms and eligibility.
Borrowing More Than Your Income
Borrowing more than you can afford has long-term legal and financial repercussions. You need to check the cost of the loan and be confident it fits within your budget. You should be able to comfortably make your repayments alongside other life expenses. Furthermore, it’s better to aim for an engagement ring that sits inside your budget rather than overspend early into your marriage. You will likely have plenty of other wedding expenses to account for and investments you need to make as newlyweds like buying a first home or a vehicle.
Getting More Than One Loan
Multiple loan applications will affect your credit score negatively. Each loan application will show up on your credit report and hinder your chances of getting a loan in the future. If you need a mortgage loan in the future, this will present complications. It’s better to select a single loan that you are eligible for that suits your needs.
Loans Before Payday
It can be tempting to apply for quick finance like payday loans. But these loans are designed for financial emergencies and should not be misused for engagement rings. A payday loan is extremely expensive. A loan of $4,000 can have an establishment fee of $400 and interest up to 48% of the loan amount. This could lead to spiralling debt and financial problems down the road.
Suspicious Lenders
Don’t take loans from unlicensed lenders. Some lenders can be predatory and offer loans that seem too good to be true. It’s always important to find a legitimate lender that’s easy to contact with a reputable online presence. To check their credibility, you need to see if they’re registered with ASIC and read online reviews from past customers to know what to expect from their service.
How Do We Rate Lenders?
Loan Term
Interests & Fees
Repayment Period
It’s important to note your repayment schedule to get a sense of your monthly total cost and affordability. You should reconsider if you will be left out of pocket.
Loan Amounts
Lenders set fixed minimum and maximum loan amounts. This usually ranges from $1,000 to $50,000 for unsecured loans. You need to check if the amount you need is within the range offered by the lender.
Types Of Rates
Consider whether you’ll be paying fixed or variable interest rates as this will affect the total cost of your loan. A fixed interest rate will remain the same over the loan period. A variable rate may change on a monthly basis depending on the market rate.
Compare Engagement Ring Loans In Melbourne
Are you looking for the best private loan to finance engagement ring costs? Our brokers can help you compare the interest rate, repayment period and any fees associated with the loan. We can help you go through different lenders to find the one that offers the best terms for your situation.
Have Any Questions? Talk To Us!
Frequently Asked Questions
What Is An Engagement Ring Finance?
Engagement ring finance is a way to finance the purchase of an engagement ring without having to pay for the ring upfront. It can be a good option for couples who want to get engaged but cannot afford the ring outright. However, there are some drawbacks to engagement ring finance that you should be aware of before you decide if it is right for you. Benefits of engagement ring finance include:
- You can get the ring you want without having to pay for it upfront.
- You can spread the cost of the ring over a period of time.
- You may be able to get a lower interest rate than if you were to finance the ring with a personal loan.
What Are My Engagement Ring Finance Options?
There are a few different ways to finance an engagement ring in Melbourne. You can either pay for the ring in cash, take out a loan, or use a credit card. If you have the cash on hand, then paying for the ring outright is the best option. This way, you won’t have to worry about making loan payments or paying any interest. If you don’t have the cash on hand, then you’ll need to finance your engagement ring. There are a few different ways to do this, and each has its own pros and cons.
- Credit cards: You can use a credit card to finance your engagement ring, but this is usually not the best option. Credit cards often have high-interest rates, so you’ll end up paying more for the ring in the long run.
- Personal loans: You can take out a personal loan to finance your engagement ring. Personal loans typically have lower interest rates than credit cards, so this is a better option if you’re looking to save money in the long run.
- Engagement ring loans: There are special loans available that are specifically for financing engagement rings. These loans often have low-interest rates and flexible repayment terms, making them a good option for many people.
When you’re considering how to finance your engagement ring, be sure to compare interest rates and repayment terms to find the best option for you.
Can I Get A Bad Credit Loan For Engagement Rings In Melbourne?
If you have bad credit, there are still options available to you. You can get a bad credit loan from a private lender or put the ring on layaway. Note that bad credit loans will incur higher interest rates than good credit loans because they are seen as risk-based financing.
No matter how you finance your engagement ring, be sure to stay within your budget so that you don’t end up in debt. An engagement ring is a symbol of your love, not a burden. Choose what’s best for you and your future spouse and enjoy this special time in your lives.