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CFD and Futures: How to Use them in Forex Trading



Some newbies in the Forex trading industry would initially involve themselves into spot trading because just like it’s name, the assets owned by the dealer are directly converted into cash. This is very similar to a moment where one gets to exchange his cash into a different currency for traveling and leisure purposes. While it is true that one gets involved in the trade when exchanging one currency into another type of currency, traders should also note that they have an option to use derivatives to earn profit. 

Derivatives in History

Derivatives can be traced back in the Ancient Greece and Mesopotamian era. During these moments, kings and other rulers would issue a decree which led lenders to precede their liabilities to the farmers. As years and go by, citizens have seen the economic uncertainties  brought by the decrees and decisions of the rulers. Thus, simple verbal agreements in the trade slowly transformed into more complicated agreements which we consider as contracts nowadays.

Examples of Derivatives

Contracts for Difference (CFDs) and Futures are two examples of derivatives that are widely used by expert traders because of their (CFD and Futures) ability to have their values be determined based from several types of underlying assets. This condition allows traders to assume price movement even without owning the asset. CFDs and Futures are both favorably leveraged financial items that bring forth higher frontage  at a small maiden investment which is equal to a part of an underlying asset’s actual value. 

Nature of Futures

Futures is a type of contract that allows a trader to either take a long position (buying) or short position (selling) on a financial item based on an underlying asset at a price agreed with a broker on a predestined schedule. Every futures agreement should indicate the following: exact quantity of the item, location and date of sale/purchase of the physical asset and the predetermined rate. Settlement in every expiration of a futures agreement can be done through debiting or crediting transactions or material delivery of the underlying asset. One boundary of this trading avenue is the fact that these contracts (futures contract) must only be traded at a specific exchange. 

Nature of CFDs

CFDs are derivatives that allow a trader to have the freedom to take whether a long or short position based on his speculations on the asset’s motion in the market. This means that one can take a long position if a trader thinks that market rates increase and take a short position if the movement goes the other way round. Because CFDs are transacted based on an asset’s fluctuation rate in the market, it can be said that the trader who assumes the right position profits well. 

Contrasting CFDs and Futures 

Listed below are the differences between CFDs and Futures

  • Spreads are less in the futures market that is why CFD handlers utilize futures to hedge on their own positions by proposing bigger spreads. 
  • Futures contracts are secured because they are highly monitored by authorities. They have fixed parameters and they can only be traded to recognized markets. Thus,experts advise newbie Forex Traders to check for accredited currency futures exchange before transacting. CFDs on the other hand are traded in a less regulated manner. Such merchandise are purchased from brokers who determine their own terms and conditions. These brokers are also the ones who create markets for these assets and they price them on a real time basis.  
  • Futures Contract sizes come in a large scale minimum rate while CFDs offer less. CFDs provide small time traders an opportunity to transact on a small scale. 
  • Leverage for futures contracts isn’t very flexible but it varies from one contract to another. Leverage for CFD is based on an initial margin that is determined by the brokers. Thus,CFD dealers purchase and sell their merchandise according to their risk preferences. 
  • Futures market has a definite schedule for the delivery of an underlying asset. This definite time of delivery is regarded as the contract’s expiration date. These dates are set by the designated exchange for respective futures. CFDs on the other hand have an open rate or expiration date. This means that an involved trader has the privilege of liquidating a contract if market flow no longer favors his position. Consequently, CFD profits and losses are calculated based on the difference of the beginning and end of contract rates. 
  • Starting an account for CFDs is a lot easier than futures because it requires small capital and less regulating bodies. 


 The FX trade has indeed evolved from simple spot trading to more complicated strategies involving derivatives such as Futures and CFDs. We can therefore say that such an industry will continue to flourish and change as time passes by. What remains constant however is the traders goal to  immediately reap good results.  Expert traders say that fast paced income is more attainable with CFDs but such items have great risks that come along with it. 

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What Is The Credit Processing & Appraisal Of Instant Personal Loan?




Personal loans are one of the best ways to take care of your financial requirements in the short term. Financial Institutions, like Fullerton India, provide some of excellent schemes for personal loans at very attractive interest rates.

However, there is a complete process to gauge the financial viability of the borrower before the loan amount is disbursed. The basic documents are collected only as per the norms of the RBI. Financial institutions are more interested in the quality of your portfolio i.e. your credit rating when you are taking a loan through a personal loan app.

In this article, we will be discussing the two major concepts of loan processing which are credit appraisal and credit processing.

2 Major Concepts of Loan Processing:


Credit appraisal is the process of assessing the various risks creditworthiness associated with repayment of the loan. 

This is a basic exercise to establish mutual trust so that the loan can be taken forward to the final stages of processing. Since there is no collateral in a personal loan, therefore, it becomes necessary for the lender to check for the credibility of the customer.

The fundamental questions asked analyzed by the lender during the processing are:

  • Who is the customer?
  • How much amount they need and when?
  • How will the loan amount will be utilized and for what specific purpose?
  • How will the borrower service the debt obligation?
  • What protection can the borrower provide the bank in the event of him/her unable to meet the agreed obligation?
  • What is the key metrics and how well are they measured, monitored and comprehend?

The five Cs of credit are kept in mind during the credit appraisal.

  • Capacity: Capacity to repay the loan.
  • Capital: To gauge the risk of pitting the capital in the hands of the borrower and deciding on the final amount. 
  • Collateral: Personal loans do not require any collateral. However, this point is taken into consideration while measuring exposure.
  • Character: To know the customer applying through an online loan app in a better way.
  • Common sense: The most subjective of the five criteria where it is one the discretion of the lender to take the final call.


The entire flow of credit processing can be divided into the following stages.

  • Prospecting: Finding a worthy client who is need of a loan.
  • Pre-approval: Getting to know the basic requirements of the client and to get done with the intial documentation.
  • Loan processing: Risk assessment and credit checks are done in this stage.
  • Credit appraisal: As discussed in the section above.
  • Disbursal: The final amount is handed out to the borrower.
  • Evaluation: Post-disbursal evaluation is done by a central agency to make sure there was no loophole in the entire processing.

This is how the entire credit processing and appraisal is done at the end of financial institutions after you apply through an online loan app. These steps are strictly adhered to in order to make sure that the process is free of any errors or malpractices. Gauging the risk at the end of financial institutions is critical as there is no collateral in a personal loan through an instant loan app.

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All You Need to Know About Top-Up Personal Loans




While planning your finances can go a long way in ensuring a timely fulfilment of various funding needs, encountering unexpected expenses is unavoidable. It can further get challenging for individuals who have already availed financing. That’s where my top up loan comes in handy, taking care of an urgent funding need during emergencies. Existing personal loan borrowers can thus avail top-up advances to fulfil their additional financing needs.

Let’s take a look at how beneficial these advances can be,the top up personal loan interest rates, and the eligibility criteria associated with them.

A quick overview of top-up advances on personal loans

Select lenders offer a significant portion of the existing personal loan amount as top-up advances. Financial institutions also provide attractive top up loan interest rates to the applicants.

The interest rates on such additional advances on personal loans are also comparatively low, making top-up loans preferable for customers.

  • Reduced processing charges and affordable rates

Since the applicant is under an existing loan, top up advances bear minimal to no additional processing charges. A new loan, on the other hand, comes with fresh processing charges and a one-time fee. Top up loan interest rates are also cheaper than a new personal loan, making them more affordable than availing a fresh advance.

  • High loan value

Borrowers can avail funds up to Rs.25 lakh over their existing loan amount. A high loan amount can thus be used to meet several emergency funding needs without depleting the savings.

  • Minimal documentation and quick verification

To avail this loan amount, the applicant must be an existing customer of the lender. Therefore, it is likely that the financial institution already possesses almost all the necessary documents. It thus ensures quick verification of a customer’s application for top up loan.

  • No hidden charges

The loan documentation from the financier will list all the associated charges in complete detail. This record of possible expenses makes borrowers aware of the repayment amount they need to meet, and there are no hidden charges to pay later.

The requirement for additional funding: Reasons to apply for top up loans

As Unsecured advances with no restriction to end-use, top up personal loans can be availed for any possible reason.

  • Medical emergencies

With high loan amounts and fast approval, applicants can use these funds to meet any medical emergency conveniently. Therefore, if an existing borrower requires additional funds for a medical emergency,he/she can rest assured knowing that their remedial expenses are taken care of as well with the advance.

  • Home Renovation expenses

Home renovation is one of the most common reasons why borrowers may take top up loans as it involves big-ticket financing. These funds are provided over and above a pre-existing personal loan and can also be used to buy new fixtures and furniture for the property under renovation.

  • Consolidation of existing debts

Managing multiple loans can be cumbersome at times as borrowers need to track individual credits and payment schedules. Top up advances can thus be availed for debt consolidation loan and be beneficial depending on your current financial situation as putting it to such use helps reduce the monthly instalments as well.

  • Big-ticket purchases

Top up loans can also be extremely beneficial when an existing borrower needs to make a new purchase requiring a lump sum payment such as the purchase of high-end gadgets, holiday bookings, etc.

One can also avail a customised personal loan for travel if such a tour involves high-value spending.

  • Increase in liquidity

Keeping more cash in hand gives the freedom to make purchases conveniently instead of opting for a financing facility. Paying money upfront helps in reducing the overhead costs in the form of interest accruing on financing the purchase. 

Also,at times making full payment in cash comes with exciting discounts.

What are the eligibility criteria to avail a top-up advance?

A pre-existing relationship with the lending institution helps while availing a top up on a personal loan. Since the borrowers are existing customers, the lender is most likely to possess the required documents already. 

Some lenders also require borrowers to complete stipulated numbers of EMIpayments to provide a top-up on the existing loan. Being a responsible borrower thus increases the chances of securing additional funds. The applicant’s credit history and repayment capability are taken into account as well.

For instance, lenders like Bajaj Finserv offer top up advances on personal loans with many attractive features to eligible customers. Any existing personal loan borrower can thus avail the advances via quick processing.

They Also provide pre-approved offers to make financing hassle-free and time-saving. Such offers are available on several financial products, such as personal loans, business loans, and credit cards. You can check your pre-approved offer using your contact details only.

The associated flexibility and reduced top up loan interest rates make it preferable over new loans.

Make sure to check your repayment capacity before availing a top-up advance. With quick financing facilities and other attractive benefits, top up personal loans can be of great assistance to existing personal loan borrowers during emergency funding needs.

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6 Factors to Consider Before opting for a Personal Loan Restructuring




The COVID-19 situation has devastated countless households. Many people who applied for personal loans are finding great difficulty in repayment, even after using an EMI calculator. Thankfully, the RBI has introduced a one-time Loan Restructuring program for everyone facing a cash crunch in their monthly income during the present COVID-19 scenario.

The RBI has put forth a deadline for banks to announce their new regulations to restructuring loans by the end of 2020, at the latest. The banks must also implement the changes by March 2021.

It could hurt your financial stability if you overexert yourself, trying to pay the EMIs. Although using an online personal loan EMI calculator can help you plan for repayment, it is always best to opt for plans that can decrease the burden during hard times.

The smart move in the scenario would be to opt for Restructuring of Loan to reduce EMI for the time being while you are in the middle of a slump. You can even use a Loan Restructuring Calculator to plan things more effectively.

However, you must be cautious to understand the different factors that play a crucial role in Personal Loan Restructuring.

What You Need to Consider Before Restructuring Personal Loan

  • Variation in Final Guidelines Between Lenders

The RBI has made it clear that the lenders will announce the Personal Loan Restructuring conditions from their end. It means that the RBI will not set any standard guidelines for this regard.

Thus, every lender will be able to choose if they will approve further moratorium or reset EMIs on outstanding amount. You need to approach the lender and check their Loan Restructuring Calculator for more details.

Moreover, a lender can also decide the loan interest rate and repayment duration. Hence it would also be wise to use a personal loan EMI calculator for further help.

  • Understand the Eligibility for Restructuring Personal Loans

Although the lender will determine the terms of Restructuring, you need to be eligible to apply for the same.

The eligibility criteria to opt for Restructuring personal loans are as follows :

  • The loan account must not have any defaults in the payment before 31st March 2020.
  • You will receive the EMI relief only if your monthly income is reduced due to COVID-19 and have a proof for it.
  • Calculate the Loan and Restructuring Cost

Use a Loan Restructuring Calculator to know the new EMIs and repayment duration and assess the situation.

Additionally, you can also use a personal loan EMI calculator to properly understand how much debt you can clear without affecting financial stability.

  • Maximum Restructuring Duration

Another thing that you need to realise is how much time it can take for you to repay the loan. RBI has given a maximum two-year window opportunity for Restructuring to loan accounts that are applying for an EMI relief.

However, if you require more extended aid, you can try transferring the balance, or opt for another loan. You can use a Loan Restructuring Calculator to analyse where you stand in the ordeal.

The Restructuring option is suitable for people who can repay the loan in two years.

  • Credit Score will Hamper for Missing Payments.

Your credit score will dip if you miss out on payments. Hence, you need to make sure that you have a game plan to repay EMIs on time.

It is essential to manage your finance since a CIBIL score drop is difficult to recover.
You can try using a personal loan EMI calculator to help you manage and keep track of EMIs, and help with the repayment process.

  • Seek Professional Advice

If your lender is unwilling to help, you can seek financial support from a third party loan advisor. A professional loan advisor can guide you in finding the best balance transfer and debt consolidation options for your current EMI and loan duration.


While things may look bleak during the pandemic, RBI’s generous one-time Restructuring of Loans are helping people get back in track. You need to understand the terms of the Restructuring process, exact eligibility, and also make sure to pay the EMIs.

Additionally, you must also seek professional help. Also, use a personal loan EMI calculator and Loan Restructuring Calculator to make better decisions.

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