The New Generation Of Traders

 

(Disclosure:This post has been sponsored by VBA Finance)

Before the introduction of technology,  getting a job in financial markets required absolutely no technical knowledge. At that time, operations of all kinds and any analytical task were done manually.

However, entering my first trading job made me realized that the technological revolution has brought us to a new era where the challenge now is to automate processes as much as possible, this with the help of computers.

The new generation of traders, which I used to belong, is now competing with more and more talented and skilled candidates that want to join this very lucrative industry. Traders that don’t know how to code still operate, but they belong to the old generation, and will not last for long.

When I joined Goldman Sachs for a trading position, I had to learn Excel VBA , which is the programming language embedded into Microsoft Excel. This is something I was not aware of, but VBA is a tool that traders and front office employees commonly use to develop automated programs in order to analyze, format and present raw financial data or even to develop charts.These automated tasks can range from extracting and formatting data from Bloomberg to creating a pricing tool for a particular product.

With VBA, an automated process of these kinds can be implemented in a few hours. Some other language can be better at the job, but it will require more resources and more time.

The beauty of VBA is that it can be used not only in Excel but in most of Microsoft applications such as Microsoft Access, Word and Powerpoint. Any computer that has one of these software can run VBA.

There are several options to get a trading position, the most common path is to come from an Ivy league school, which I feel blessed to have attend.

But that was seven years ago, and trends have changed. Just keep in mind that with the constant need of technical people in banks , you might be able to go to the top if you have the right technical skills, regardless of your academic background.

How is a Super Top-Up policy different from Mediclaim?

The health of an individual is one of the most important aspects of a long and fulfilling life. But there is no guarantee that eating right and exercising will ensure a healthy life. Apart from healthy living, one should also ensure that there is a comprehensive health insurance to cover any sudden expenses that arise due to illness or an accident. Life is unpredictable, and it can take any turn.

The rise in medical costs has made it necessary for every individual to have a health or mediclaim insurance plan. A health insurance plan provides a cover in times of medical illness and accidents. Most of the times we make a mistake of ignoring a personal health cover. The health insurance provided by the employer is not sufficient to provide for the medical and health expenses of an individual.

A personal health insurance provides for an individual based on the policy and premium opted. A mediclaim will reimburse the hospitalisation and medical expenses due to an illness or a sudden accident. Further, a mediclaim and a super top-up policy can work along with one another. That is, if you have a mediclaim, you can also purchase a super top-up policy to get a complete cover. 

A super top-up policy comes into play when you have utilised the threshold amount in your policy. The super top-up mediclaim policy will give you a cover after you have exceeded the limit on your mediclaim. This means you get an additional cover without having to spend a huge sum on the same. This particular amount is known as a deductible amount and the insurance company that will reimburse your claim is liable to do so only after you have utilised the existing limit of your policy.

Thus, a reimbursement in the case of a super top-up plan will only occur once the entire threshold limit is crossed. There is a difference between a top-up and a super top-up policy. In the case of a top-up plan, the claim amount is considered individually. Whereas in the case of a super top-up plan, the claim amount is aggregated. This simply means that a total of all your medical claims will be considered before the claim is accepted. It helps to bridge the gap between the top-up plans and a mediclaim.

The biggest advantage of a super top-up plan is the additional cover it provides at no huge expenses. It provides a high end health cover without having to spend a huge sum over it. It is an independent policy that helps you cover all the additional expenseswhen the mediclaim cover is exhausted. Once you exhaust your specific limit of the policy, the super top-up will come into play.

It is an ideal move to purchase a super top-up for yourself, to ensure a complete risk cover and also gain reimbursement of your medical expenses. Depending on your age and medical history, you can make your choice for the type of policy you require. And based on the policy you choose, you can buy a super top-up plan. Like the name suggests, a super top-up plan will be an added benefit for your health and will work as a top-up once your existing limit has been utilised.

It is not mandatory to have a regular insurance plan to be eligible for  asuper top-up plan. You can purchase a super top-up independently from any insurance company. It is important to learn the terms and conditions of the super top-up plans and also learn about the deductible amount offered by the companies. Higher the deductible amount, lower is the premium for your plan.

Super top-up plans are also available for an individual as well as a family floater plan. Further, one can also purchase super top-up plans for senior citizen individuals. It provides a vast coverage on health and ensures that the claim amount is easily reimbursed.

It makes sense to purchase a super top-up plan when the existing limit on your policy islow. The reimbursement of hospitalization expenses ensures that you can get the best treatment from the best hospitals and do not have to spend all your savings on the same. A top-up plan will provide you with the best medical facility and reimburse the amount with ease. Super top-up plans are best suited for senior citizens because of the frequency of health issues and illnesses. It is a smart move to purchase a super top-up plan independently on all policies so that one can get a reimbursement for the amount spent over and above the threshold limit of your policy.

 

What to do if you can’t get credit because of poor CIBIL score?

(Disclosure: This blog post is sponsored by Credit Sudhaar)

CIBIL score plays a crucial role in our financial lives. Most banks and financial institutions access your CIBIL report and score to do a background check and understand your credit behaviour before approving a credit application. A high score helps in winning their confidence in your ability to repay the money borrowed. Hence a good credit score increases the likelihood of getting approved for a loan. However, a low CIBIL score makes it difficult to find a willing lender. So if you have not kept up with your credit agreements or if you have high credit balances then these details get recorded in your report and screw up your CIBIL score. People view you as a risky borrower who might default in loan repayments.

If your loan application got turned down because of a bad CIBIL score do not despair. Here is what you can do to improve credit score and increase your chances of approval.

  1. Check your CIBIL report for errors– This is the first and foremost step that you should take to ensure that all the recorded data is accurate and up to date. If you find any erroneous information immediately report it to CIBIL and get it corrected.
  2. Credit repair – Bad credit score does not last forever. If you take steps to improve credit score then new positive information will certainly overshadow old negative records and help in bad credit fix. Analyse your report to identify the causes of the poor score. Is it missed or late payments, huge debt balances or over dependence on credit card that is bringing your score down? Work on the problem area, clean up your earlier defaults and start making payments on time.

Keep in mind that it will take some months before you can see improvements in your score. But if you are in urgent need of funds here are some alternative ways in which you can secure credit even with a bad credit score.

  1. Secured loan– While it is difficult to get an unsecured loan with a poor CIBIL score, it is not the case with secured loans. If you have an asset to provide sufficient security to the bank, like Gold, FD, Insurance policy or PPF then you may be able to get loan even with a bad credit score.

 

  1. Cooperative banks- You can try your luck at cooperative banks that provide small ticket loans. If you have good income and a stable job,take your monthly statements and try to gain their trust on your credibility. Show the bank that you are financially capable to repay the loan on time.

 

  1. Joint loan- If you are not able to secure a loan because of bad credit, try the route of joint loan with a family member. If they have a good credit score then applying a joint loan with them will increase your chances of approval.

 

  1. Guarantor– You can even ask a friend or family member with a good credit score to stand as a guarantor for the loan. When banks see that they can recover their investment even if the primary applicant defaults they may be willing to grant you loan even if you have a bad credit history.

 

  1. Peer to peer lending- While mainstream banks shy away from lending to people with a bad credit score there are lenders who do not follow this theoretical approach of credit assessment. The Peer to peer lending market is rapidly increasing its presence in India. Here the lenders look at the bigger picture and not just the credit score. So if you have a valid explanation of why your score went bad and why they should still trust you with their money you can stand a good chance of getting funded.

 

  1. Non-banking financial institutions-You can also have a better chance of striking a deal with NBFCs who usually have a flexible approach. Today there are lenders who may look at extending personal loan for low CIBIL score. They lend to risky borrowers but charge a higher rate of interest to compensate for the risk. If you have a genuine reason for defaulting on payments like job loss or emergency hospitalization you can expect NBFCSs to overlook your score and offer you loans.

 

There are several options to secure loan for bad credit. The only downside is that the high rate of interest at which they are available may hit your finances hard. Once you secure these loans make sure you make the payments on time and work towards building a good credit score.

 

Professional Indemnity Insurance

Here’s How to Keep Your Personal Finances Safe from Professional Mishaps

 

Professionals like doctors, engineers, architects, interior decorators and legal consultants or lawyers, chartered accountants and management consultants are looked up for their honest and dedicated service for their clients. Certain professions related to medical and law are highly respected in our country. Doctors are considered capable of saving lives in the most hazardous situations. Engineers, architects and interior decorators lay out their imaginative designs and ensure a sophisticated life for people. Similarly, lawyers fight for their clients and save them from punishment that may take up a chunk of people’s life or savings.

But, there are two sides to the same coin. Even though all these professional services are highly respected, there may be a time when these professionals may commit an error knowingly or unknowingly in their professional position. After all, no one can be 100% perfect in his or her job. There may be times when errors might be committed in professional position giving rise to unexpected civil liability towards the third-party. Such professional errors can cost a huge burden on the life and savings of their clients.

Take the recent case of the error committed by doctors in the Fortis Hospital who committed the surgery on the wrong leg of the patient. Even though these staffers were suspended in the said case, taking into account the gravity of the error, such cases do happen even in the medical field. According to a recently published study, legal proceedings accusing doctors of negligence have seen a rise of 400% in the Supreme Court. Although, only about 10%- 15% of the cases have seen doctors being found guilty, the remaining 85% medicos had to incur the cost of defending themselves.

In some cases, a doctor is sued even for a minor error. It may be that the legal liability may require him to pay a huge amount of money which he is unable to afford. He may have to part with his personal assets in such a case. There are also cases in which the doctor or the staffers are held responsible for the death of the patient. Similar cases can result in other professions like the dispute of a lawyer with his client on fees, the difference in the output of the work assured by an interior designer, any loss that the client may have suffered due to improper advice by a management consultant etc. The penalty in case of a professional mistake can be sometimes exorbitant. It may render the concerned professional helpless in the absence of an insurance policy. He may have to pay the compensation by selling off his valuable personal assets, part with his savings or terminating his services as he may not be left with suitable financial backup to run it and lose trust of his clients as well.

To protect themselves from such third-party liability, professionals can opt for the professional indemnity insurance ,also called as Errors & Omissions.

Indemnity Insurance policy covers the claim settlement out of court, compensation, court fees and other expenses arising due to any kind of error done in the professional position. It covers the insured for any error that may not involve wilful neglect and is caused by unplanned errors and omissions.

The limit of indemnity or the sum insured in this policy is fixed as a ratio between per accident and per policy period which is called Any One Accident (AOA) limit and Any One Year (AOY) limit respectively. In general cases, the Any One Accident limit is restricted to 25% of the Any One Year Limit. This is also available as a group policy which can be availed by hospitals, nursing homes, management agencies for its entire practicing staff with discounts in the premium.

Extensions can be purchased to cover overseas litigation filed by foreign clients and customers. An emergency cover can be purchased for such cases that will provide the money to you on a short notice. There is also a provision for claims in the retroactive period. This means that if a certain claim is made in the current renewed policy period due to an error that was committed in the earlier period, such a claim will be payable.

The insurance policy keeps the personal finances of a professional safe from mishaps. It is a significant policy that needs to be availed by professionals as it safeguards them from effects of their unplanned errors that may undermine their reputation, force them to discontinue their services or simply force them to part with their personal assets.

 

Things to Do When Applying For a Home Loan

(Disclosure: This blog post is sponsored by Credit Sudhaar)

Buying a house is a dream of one and all. There is certainly great demand for purchase of residences and a matching demand for home loans. In today’s age of soaring property prices, buying a property for self-consumption seems like a distant dream. Thus, hardly anyone can achieve it without seeking external financial assistance. In fact, builders include it in their sales pitch and even offer to help to find a suitable lender.

To reach one’s goal of having a home they desire, one has to get past several challenges. Monetary constraints are the biggest obstacle in their path. A lot of people have found that with the help of home loans they can steer clear of most hurdles and achieve their goals sooner than they thought. Home loans can be taken for land purchases, house purchases and for home improvements. There are home construction loans available too that help you build the house of your dreams on a plot of land you own.

Home loan is a secured form of debt. Although relatively easier to get but there are quite a few factors involved before a lender signs the dotted line on the sanction letter. Here is a checklist of things you must do before you decide to take the plunge:

  1. Creditworthiness: This factor is primarily determined through your three digit credit score and CIBIL report. Lenders do a credit check as a first step in evaluating your application. Before you apply for a home loan, seek a copy of your credit report and go through it to determine what a lender would notice in it. If you find any errors in your report then do raise a dispute to have them rectified. Work to having a better score even if you are in the 750 or more bandwidth.

 

  1. Age Factor& Tenure:People in their early 20s or 30s will find it relatively easier to get home loans rather than those in their 50s. The tenure for a standard home loan is roughly between 20 – 30 years. Thus, where an individual in their 20s can take advantage of a long tenure, thereby reducing impact of EMI and spreading the burden over a longer tenure. Whereas, a person who is, suppose 53 years old, may have to pay off the loan in a shorter tenure, for example in 10 years. Although this means that the older person would be paying little interest as compared to the younger one but the former one will have to bear a very high EMI and unless the income permits, it can be a cumbersome task.

 

  1. Economic Bracket & Job Stability: Your level of income, the nature of your job and your employer are all important factors that a lender looks into while scrutinizing your loan application. The higher your income, the less risky nature of your job, if your job is quite stable and your employer has a good track then you are likely to get a higher loan value.

 

  1. Outstanding Loans:Prior to giving a thumbs-up to your loan application, lenders like to assess your current debt burden. Since existing gross EMIs affect a borrowers repayment capacity, it is advisable that you close down on any of your currently active loans, repay them in full and make sure that you debt to income ratio is low. Don’t think you will not get a home loan for bad credit score. Rather get someone to guarantee your loan application and you will be good to go.

 

  1. Co – borrower or Guarantor:When a person who falls in the higher age bracket applies for a loan then having a younger person co-sign the loan application helps increase the chances of loan being approved. This is so because the eligibility and repayment capacity increases.

 

  1. Miscellaneous Factors: There are quite a few more factors that impact your loan evaluation process like the amount of down payment, whether the residential project is approved by the bank or not and your documentation should be authentic and complete.

 

  1. Document Checklist: In the preliminary stage of your plans to apply, make sure you have all the necessary documents ready to avoid last minute rejections of your loan. The following is a list of the main documents you will need:
  1. Complete and duly filledloan application form
  2. Identity Proof
  3. Address Proof
  4. Proof of age which can be same as identity proof
  5. Proof of income – salary slips, bank account statements, etc
  6. Proof of employment
  7. Tax returns for last three years.

All in All

A lot of people apply for home loans in the hope of owning a perfect abode for themselves. The fact that home loans offer added benefits like tax rebates is like cherry on the top. In India currently, SBI, HDFC, LIC Housing Finance, ICICI Bank and Axis bank are the key players in home finance offering competitive interest rates. There are several banking and non banking financial institutions that are willing to lend to prospective home owners. Doing a due diligence before you zero in on your pick of lender is a smart move.

Be prepared with all the documentary proofs and envision your meetings with the lender. If you have the slightest of doubts then seek help of expert credit consultants to sail through your financial dealings.

Good Luck!