How to Get a Forex Trading Loan in Kenya

Forex trading loans
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Introduction

Do you want to borrow money for forex trading?

You might have a clear money-making opportunity on Forex but fail to find the money to invest. Instead of letting an opportunity pass you by, it would be a good idea to make use of forex funding loans.

It is important that you as a trader understand the basics of forex funding loans before proceeding because they will help you get better deals and terms; make sure to read through them before asking for any information on loans by foreign exchange dealers (FEDs) in Kenya.

One thing that all forex traders should understand is that FEDs in Kenya need to know who they lend their money to, as most of them do not (and probably will never) have any information on your trading background; so be prepared for hard questions when applying.

How to get a forex trading loan in Kenya: Have a sound repayment plan in place

Types of Traders

Forex traders fall into 3 categories:

·        High-risk

·        Medium-risk

·        Very low-risk.

The level that you fall under depends on a number of factors but mainly, the experience and track record.

If you are a high-risk trader, then expect to pay high interest rates and get fewer repayment plans. If you are medium risk, then you can expect to pay good interest rates and have many repayment plans while low-risk traders will pay lower loan costs and have flexible payment terms when getting forex lending.

Types of Forex Trading Loans

To borrow money for forex trading, you have to know that f

orex trading loans in Kenya come in two types namely:

a)      Secured and Unsecured Forex Funding Loans

You will be required to place your property as collateral if you want a secured loan while an unsecured loan does not require any form of security. Forex brokers in Kenya offer both types.

b)     Revolving and Term Forex Funding Loans

Revolving loans allow you to borrow several times when the repayment period has elapsed without having to worry about placing more security with the lender. Your credit line will increase by $250 for every successful forex deal.

You can get a revolving loan from most forex brokers in Kenya. Term loans are the opposite of revolving ones in that they only give you one chance each time they lend out money to pay back when the specified time has elapsed.

The benefit is that interest rates are usually lower and you only need to make one deposit as security now that you know how to fund your forex account through this loan.

How to get a forex trading loan in Kenya: High risk traders typically get loans with fewer repayment plans

Where to Get Forex Trading Loans in Kenya

Getting a forex trading loan in Kenya can be done from a number of lenders. But the most common places that Kenyans get their forex trading loans from are:

a.      Banks

b.      Friends and Family

c.      Forex trading institutions

Some types of forex trading loans in Kenya are government-backed and so they tend to require less financial information than the ones that you would get from a private lender.

You need to submit documents such as your business plan (if you have one), collateral, checking accounts, and any other types of proof that you can find which will show the lender that you are financially stable enough for them to deal with you when it comes time to repay what you owe them.

1.      Banks

If you have thought about getting forex trading loans, you have probably wondered whether banks will lend it to you or not, right? It all depends on what type of bank you are dealing with in regards to if they will help you get one or not.

You can get forex funding loans from banks but most of them will want you to have been doing forex trading for at least three years before they are willing to lend money to you, unless it is a large bank that deals specifically with forex traders.

2.      Forex Trading Institutions

There are some forex trading institutions that offer forex trading loans to their members. This includes forex teaching institutions and forex trading companies.

Forex trading institutions that work with forex traders to help them make money trading, it makes sense for these types of institutions to offer extended term loans to their clients.

3. Friends and Families

This is the best way to get yourself forex trading loans out of all the others. This is where your forex trading buddy or relation will lend you money to trade with. It may be hard to get such types of loans, as they may require collateral and regular payments in order for the lender not to lose out on his investment.

3.      Forex Brokers

Some forex brokers will provide forex trading loans to their members. You can check their websites to see if they offer trading loans.

Note that forex brokers, unlike banks and other types of lenders, may have higher interest rates since it is a riskier type of investment and you do not own any equity in the business.

Want to start your trading career? Find the list of CMA regulated brokers that you can trade within Kenya. If you are new to forex brokers then I recommend to understand the basics before starting out. 

If you already have the knowledge then you can go ahead and sign up with a forex broker of your choice. Here is our recommended list of forex brokers:

Broker NameMinimum DepositSpreadsRegulationWebsite
Fx Pesa5$ 0.01CMAOpen Account
Scope Markets20$ Spreads from 1.2 CMAOpen Account
Exness10$ From 0.0 CySEC and FCA Open Account
Hot Forex5$ From 0.0 FCA, DFSA, FSCA and FSA Open Account
Pepper StoneNoneECN spreads from 0 pips for EUR/USDFCA, ASIC and DFSAOpen Account
FXTM50$ 0.1 on ECN accounts and 0.5 on Standard accounts CySEC and FSC Open Account
Table of our recommended Forex Brokers in Kenya

4. Propietary Trade Firms

Prop Firms is another source for loans where you are offered an amount of money for trading purposes at a small fee and profits are shared amongst you and the prop firm. Some of the most renown prop firms include FTMO and the5ers

5 Tips to Get a Forex Trading Loan in Kenya

1.      Choose your lender carefully- every lender will come with different terms and conditions which should be suitable for you.

2.      Take the loan for a short period of time – one should go for money lenders that will allow you to repay the borrowed money within a short period of time which is ideally between six months’ maximum.

3.      Establish how you will repay the borrowed funds – this means that you have to outline how you are going to use the funds and how soon they will be repaid once taken from the lender.

4.      Understand how much you want to borrow – it is advisable that you remember to only take a loan which will not cause any problems for you and your family.

5.      Seek for a loan that is best suited to your needs – while getting a loan from different types of forex traders in Kenya, it is good to ensure that the lender offers flexible terms regarding the repayment periods.

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So, Should You Go for Forex Trading Loans?

Understand what getting forex trading loans will mean to you. The types of forex trading loans available suit someone who trades forex means that you should probably trade in a shorter time frame and also have more money to invest.

The types of forex trading loans can be quite beneficial when you want a short-term loan for your forex trading activities. These types of loans are not really meant for long-term forex traders, but rather those who engage in margin trading.

The types of forex trading loans usually offer low-interest rates as well as quick processing times. Also, it is important to note that these types of forex trader loans do not require having collateral or credit history, thus making them available to people with bad credit ratings and no collateral to secure a loan anywhere else.

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