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Many a turn of phrase comes to mind regarding the idea of proposals and engagements: finding ‘the one’, ‘popping the question’ and ‘tying the knot’ are but to name a few. Possibly the most indicative of our time is a phrase coined by one iconic celebrity (you know who I’m talking about) and is now a verb in the official Urban Dictionary: to ‘put a ring on it’.

There’s a lot of social expectation surrounding ‘the ring’, and often, it’s a big price tag that often comes attached, something that can threaten debt simply by choosing to wed. A 2017 survey by My Wedding Australia estimated that the average spend on an engagement ring was $6,143. This can be a hard sum for many would-be-weds to stump up.

If you want to get the perfect engagement ring for your one and only, but don’t have the funds just yet, there may be some financing options available to you, such as interest-free finance and personal loans that can be used for jewellery.

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Financing options:

  • Interest-free finance: Various jewellery and retail outlets work with providers like zipPay and Afterpay, where users can make purchases on an interest-free line of credit and then pay it back in more manageable instalments. In other words, buy now, pay later. While this can work well if you’re good at sticking to a budget, you may be hit with high late fees if you fail to meet repayments.
  • Credit cards: You can find 0% purchase credit cards. This means that for an introductory period of 4 to 15 months, you can make purchases on your card and pay back the balance with no interest. If you budget smart, this could be a viable option, but if it takes you more than expected to pay off or you have an unexpected expense, you may find yourself incurring large amounts of interest.
  • Instore finance: Many jewellers offer in-store repayment plans. Each will come with their own terms, fees and rates
  • Unsecured personal loan: Depending on your credit history, you may also be eligible for a personal loan. It is important to compare personal loans, and to consider how much you will end up paying in interest repayments.
  • Secured personal loan: Secured and unsecured personal loans range from anywhere between $2,000 and $50,000. However, using a secured personal loan to purchase an engagement ring might be a risky bet. While no one goes into a proposal thinking that the significant other will say no, these things do happen. Depending on the returns policy with the jeweller (most of the time, the ring loses 50% of its retail value the second it leaves the store) and your financial circumstances with the loan repayment, you probably won’t want to end up risking your car or even your house.

How much does an engagement ring cost?

An engagement ring is only really as expensive as you want it to be. It’s considered mantric that an engagement ring ought to cost two months salary, but this was a marketing campaign (along with the famous phrase ‘a diamond is forever’) by the De Beers diamond brand little more than 100 years ago. Kind’ve blows the whole ‘age old tradition’ thing out of the water, right?

If you earn $60,000 a year, you do not necessarily need to spend $10,000 on a piece of jewellery, just because you are told by a 100-year-old marketing campaign to do so. By all means do, if that’s what you want to do, but just know that it certainly isn’t mandatory.

While the average spend on an engagement ring might be $6,143, be sure to consider what you personally can afford, and what your partner may actually want. What they’re likely looking for is a person to spend the rest of their life with, and while diamonds proclaim to be ‘a girl’s best friend’, no woman or man wants to have a relationship with one.

Your future together (and that means your combined finances) is a big factor in marriage. It may very well not be worth getting into debt that you cannot, without certainty, repay, as you may subsequently jeopardise the future that you are actually proposing to your partner.

Can I get a personal loan to fund my engagement ring?

There are many financing options available for the funding of an engagement ring. If you are looking for a personal loan to fund your bling, it may be worth making sure that you find a loan with no early repayment fees. If something were to unfortunately go awry, you may want to sell and pay off the loan more quickly to avoid an accumulation of interest.

 

Top tip:

Whatever your method of financing your engagement ring, whoever your boo, whether you plan on getting down on one knee, popping the question over a home cooked dinner, or if you plan on shouting it from the main stage at Glastonbury festival, just don’t, under any circumstances whatsoever, put it in an avocado.

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Personal loans for luxury watches

Looking for a new luxury watch but don’t quite have the funds? While some of us may be looking to finance the symbol of a new time in our lives, others just may just want to finance the time. Sometimes, a bit of retail therapy every once in a while is the only thing that will scratch an itch. So, if you’re feeling the self-love and want to splurge, there are some financing options available to you also.

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Can I get a luxury watch on finance?

Yes, you can get a luxury watch on finance, with a personal loan able to be used for a new shiny ornament for your wrist. Financing a watch is much the same as financing an engagement ring. If anything, financing a luxury watch is potentially a little less risky. Some watches, unlike engagement rings, hold their value, though bear in mind that many still decrease in value straight after purchase. Plus, if you’re buying it for yourself, you know you’re going to love it.

Warning:

While using convenient services like, zipPay, Afterpay and credit cards might seem like a sure-fire way to get what you want, when you want it, with little consequence, just be sure that you can factor the repayments into your budget. Have a good look at your income and outgoings before committing yourself to debt, especially for luxury items. You may end up paying for that impulse buy long after you’ve fallen out of love with it.

Frequently asked questions

What is a personal loan?

A personal loan sits somewhere between a home loan and a credit card loan. Unlike with a credit card, you need to sign a formal contract to access a personal loan. However, the process is easier and faster than taking out a mortgage.

Loan sizes typically range from several hundred dollars to tens of thousands of dollars, while loan terms usually run from one to five years. Personal loans are generally used to consolidate debts, pay emergency bills or fund one-off expenses like holidays.

Can I get a personal loan if I receive Centrelink payments?

It is hard, but not impossible, to qualify for a personal loan if you receive Centrelink payments.

Some lenders won’t lend money to people who are on welfare. However, other lenders will simply consider Centrelink payments as another factor to weigh up when they assess a person’s capacity to repay a loan. You should check with any prospective lender about their criteria before making a personal loan application.

How are personal loans regulated?

Personal lenders in Australia are regulated by ASIC (the Australian Securities & Investments Commission) and must follow responsible lending rules. That means they can’t lend money without making “reasonable inquiries” about a borrower’s financial situation and ensuring the loan is “not unsuitable” for them.

How long do personal loans take?

Depending on the lender, some personal loan applications can be approved in as little as one hour, or you may need to wait until the next business day. If approved, you may receive your money on the same day, the next business day, or within the week.

Where can I get a personal loan?

The Australian personal loans market contains dozens of lenders offering several hundred different products. Personal loans are available through a range of institutions, including:

There are three main ways to access personal loans. You can go through a comparison website, such as RateCity. You can use a finance broker. Or you can directly contact the lender.

What are the pros and cons of personal loans?

The advantages of personal loans are that they’re easier to obtain than mortgages and usually have lower interest rates than credit cards.

One disadvantage with personal loans is that you have to go through a formal application process, unlike when you borrow money on your credit card. Another disadvantage is that you’ll be charged a higher interest rate than if you borrowed the money as part of a mortgage.

Can you refinance a $5000 personal loan?

Much like home loans, many personal loans can be refinanced. This is where you replace your current personal loan with another personal loan, often from another lender and at a lower interest rate. Switching personal loans may let you enjoy more affordable repayments, or useful features and benefits.

If you have a $5000 personal loan as well as other debts, you may be able to use a debt consolidations personal loan to combine these debts into one, potentially saving you money and simplifying your repayments.

What is a bad credit personal loan?

A bad credit personal loan is a personal loan designed for somebody with a bad credit history. This type of personal loan has higher interest rates than regular personal loans as well as higher fees.

How much can you borrow with a bad credit personal loan?

Borrowers who take out bad credit personal loans don’t just pay higher interest rates than on regular personal loans, they also get loaned less money. Each lender has its own policies and loan limits, but you’ll find it hard to get approved for a bad credit personal loan above $50,000.

Does refinancing a personal loan hurt your credit score?

Personal loan refinancing means taking out a new loan with more desirable terms in order to access a more competitive interest rate, longer loan term, better features, or even to consolidate debts.

In some situations, refinancing a personal loan can improve your credit score, while in others, it may have a negative impact. If you refinance multiple loans by consolidating these into one loan, it could improve your credit score as you’ll have only one outstanding debt liability. Your credit may also improve if you consistently pay the instalments on time.

However, applying to refinance with multiple lenders could negatively affect your credit if your applications are rejected. Also, if you delay or default the repayment, your credit score reduces.

Is a personal loan a variable or fixed-rate loan?

Depending on the personal loan lender, you may be able to choose between a fixed and a variable interest rate. But, there are a few distinct differences between the two, so it’s important to weigh up the pros and cons before deciding on what’s right for you.

A fixed interest rate loan gets you the convenience of knowing exactly how much you need to repay each fortnight or month. On the other hand, you generally won’t be able to make lump sum or advanced payments to close your personal loan early - or at least not without a penalty.

With a variable interest rate personal loan, you may be able to get a longer loan repayment term, with the option of paying off the loan early. You typically won’t need to pay any additional charges for an early full repayment either. The potential disadvantage with an interest rate that can change is that your repayment is not entirely predictable, as it can fluctuate with the market. However, you’ll likely have more options as more lenders offer a variable interest rate personal loan.

Are there low doc personal loans?

Self-employed borrowers may be eligible for low doc personal loans, which require less documentation in their application process than many other personal loan options.

It’s important to remember that though low doc personal loans may require less paperwork, you may need to provide additional security, or pay a higher interest rate.

Should I get a fixed or variable personal loan?

Fixed personal loans keep your interest rate the same for the full loan term, while interest rates on variable personal loans may be raised or lowered during your loan term.

A fixed rate personal loan keeps your repayments consistent, which can help keep your budgeting consistent. You won't have to worry about higher repayments if your rates were to rise. However, on a fixed loan you’ll also potentially miss out on more affordable repayments if variable rates were to fall.

What is the average interest rate on personal loans for single parents?

Like other types of personal loans, the average interest rate for personal loans for single parents changes regularly, as lenders add, remove, and vary their loan offers. The interest rate you’ll receive may depend on a range of different factors, including your loan amount, loan term, security, income, and credit score.

Can unemployed single parents get personal loans?

It can be more difficult for unemployed borrowers to successfully apply for a personal loan. Most lenders require borrowers to have a regular income available to cover the cost of loan repayments.

If you’re self-employed, or if less than half of your income comes from Centrelink, you may not be eligible for some personal loan options. Consider contacting the lender before applying.

Can I merge my personal loan with my home loan?

Yes, you can refinance your home loan and, in the process, merge or consolidate your personal loan and home loan. By doing so, you can lower the number of debts you have, and you may also reduce the total interest you have to pay.

However, you should consult a financial advisor or a mortgage broker to confirm that you are decreasing your total outstanding debt, including interest payments. The repayment term for a home loan can be much longer than that for a personal loan, and by merging the two, you could be repaying a higher amount over the full term.

How can I get a $3000 loan approved?

Responsible lenders don’t have guaranteed approval for personal loans and medium amount loans, as the lender will want to check that you can afford the loan repayments on your current income without ending up in financial hardship.

Having a good credit score can increase the likelihood of your personal loan application being approved. Bad credit borrowers who opt for a medium amount loan with no credit checks may need to prove they can afford the repayments on their current income. Centrelink payments may not count, so you should check with the lender prior to making an application.

How long does it take to get a student personal loan?

Completing an online personal loan application can often take anywhere from 10 minutes to 1 hour. Depending on your lender, processing your personal loan application may take anywhere between 1 and 24 hours. If your personal loan application is approved, you may receive the money in your bank account the following business day, or, in some cases, the same day.

Can I get a self-employed personal loan with bad credit?

It may be much more difficult for a self-employed borrower to successfully apply for a personal loan if they also have bad credit. Many lenders already consider self-employed borrowers to be riskier than those in full-time employment, so some self-employed personal loans require borrowers to have excellent credit.

If you’re a self-employed borrower with a bad credit history, there may still be personal loan options available to you, such as securing your personal loan against a vehicle of equity in a property, though your interest rates may be higher than those of other borrowers. Consider contacting a lender before applying to discuss your options.

What is an unsecured bad credit personal loan?

A bad credit personal loan is ‘unsecured’ when the borrower doesn’t offer up an asset, such as a car or jewellery, as collateral or security. Lenders generally charge higher interest rates on unsecured loans than secured loans.