Different types of loans for financing wedding jewellery
Getting engaged and married can be one of the most important rituals of adult life, and demands to be distinguished with some special preparation. Picking up the right engagement ring can be a deal maker or breaker in itself, and can end up requiring a substantial outlay. Marriage will (hopefully) be a long-term commitment, however, and viewing the ring as a life-long investment is perhaps the correct way to appraise the situation.
In the short term you will nonetheless need to find sufficient funds, and for most normal people this will mean looking to secure some form of credit. The most common of these are loans, overdrafts and credit cards.
Credit cards can be very expensive in terms of interest, and are only really advisable as a short term source of credit. If you are able to find a credit card with an interest free on purchases introductory offer, a credit card can also be the cheapest form of credit but only if you are able to pay off or move the balance before the end of this period, and have the discipline to be able to achieve this.
Interest free overdrafts are offered by some banks, again usually to entice your business as a introductory offer; but given the potential outlay involved in picking wedding jewellery, this option may not offer credit on a long enough term.
Loans come in two main types; and these are secured and unsecured loans. Secured loans involve offering one of your capital assets usually your house as security on the loan, meaning that if you default on loan repayments, your home can be repossessed. Secured loans are therefore generally to be avoided at all costs.
Personal loans, such as those offered by the high street banks like Santander, are unsecured loans, and offer a much safer option for borrowing (take a look at the Santander site for more on loans). Since you offer no security on these loans, the lender will have to be satisfied that you are a good risk, so personal loans are usually available only to those with a reasonable credit rating. Check out your credit rating for free online before applying for a personal loan, as a loan refusal can in itself damage your credit score. You can see your rating free by signing up for a years account with one of the credit reference agencies, and then cancelling the contract before the free introductory period elapses.