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October 19, 2021

Employers with more than 100 workers may soon be required to dismiss those who refuse to get the coronavirus vaccine or agree to regular COVID-19 testing once an employer vaccine mandate from the Biden administration goes into effect.

Several vaccine mandates rolling-out
Additionally, it's unclear if workers who are fired for being unvaccinated will qualify for unemployment benefits. The Unemployment Insurance (UI) program provides cash benefits to unemployed Americans. To be eligible for UI benefits, you must be unemployed through no fault of your own, or "for cause" — in most cases, that means being laid off due to a lack of available work.

But like many aspects of the vaccine mandate, there are questions surrounding its impact on unemployment insurance benefits. It's unclear if refusing to get vaccinated would make an employee non-compliant with company policies, or if mandatory vaccinations are a reasonable policy in the first place.

It may also depend on the state in which you live. While lawmakers in some states are introducing their own vaccine requirements, others are working to ban vaccine mandates altogether. 

If you've been denied unemployment benefits, whether for refusing to get vaccinated or another reason, there are several ways to make up for lost income. Depending on your financial situation, you might consider tapping into your retirement early, cashing in on your home equity or borrowing a personal loan.
Consider your options in the sections below, and visit Credible to compare interest rates for a variety of financial products to ensure you're getting the best interest rate possible for your situation.

3 ways to borrow money if you don't qualify for unemployment
Your financial obligations don't just stop when you're unemployed, and it can be challenging to pay bills and afford basic living expenses with no income. You also don't want to rack up high-interest credit card debt or take out a predatory payday loan just to supplement your bank account.

If you've been denied unemployment insurance benefits and you need money now, consider these types of loans:
  1. Unsecured personal loans
  2. 401(k) loans
  3. Cash-out mortgage refinancing
Although borrowing cash loans may not be your first choice, it can be an effective way to tide you over while you search for a new job. Weigh your borrowing options in the sections below.

1. Take out an unsecured personal loan
Personal loans are lump-sum loans that you repay in fixed monthly payments over a set period of time, typically a few years. Personal loans are usually unsecured, which means they don't require you to put up an asset you own as collateral.

Because unsecured personal loans don't require collateral, lenders determine eligibility and set interest rates based on your likelihood of repaying the loan in full. They'll consider factors like your credit history and debt-to-income ratio, which is your annual income compared to the amount of debt in your name.
Besides your employment income, though, personal loan lenders may also consider an alternative source of income like Social Security benefits, alimony, and child support. So even if you're unemployed, you may still be eligible for a personal loan with low debt and proof of income.

Borrowing a personal loan can be a good alternative to making purchases on a credit card with high-interest rates and additional fees. In comparison to credit cards, personal loans can come with lower interest rates. The average rate on a two-year personal loan is 9.39%, according to the Federal Reserve, in contrast to 17.13% for credit card accounts assessed interest.

2. Borrow from your retirement savings
When you're struggling to get by financially, you might consider tapping into the money you have saved up in your retirement account. Many retirement plans let you borrow cash loans from your own nest egg, called a 401(k) loan. Since you're borrowing from your own retirement account:
  • You don't need a credit check
  • Interest rates are relatively low
  • Your repayment terms are flexible
However, taking money from your retirement savings comes with its own set of risks. If you don't repay the loan within a set period of time, you may have to pay an early withdrawal penalty on top of any late fees assessed for nonpayment. And some retirement plan providers require that you're still currently employed, which can make this a dead-end option for certain borrowers.

3. Utilize cash-out mortgage refinancing
When you're unemployed and need money now, there's another alternative to tapping into your emergency fund or racking up expensive credit card debt — taking advantage of the equity you've built in your home.
Cash-out mortgage refinancing is when you take out a larger mortgage to pay off your current home loan. 

Home equity is at record highs, which means you may be able to borrow more than ever before. Plus, mortgage rates are near record lows, meaning that you may be eligible for a lower rate than what you're currently paying.

When considering whether to refinance your home, there are a few things to keep in mind. First, can you afford the new monthly mortgage payments? If your new home loan is larger, your housing costs are likely to rise. Also, is it worth paying closing costs? Mortgage refinancing fees like closing costs are typically around 2-5% of the loan value, according to Credible, and are rolled into the total loan amount. However, this can be an added financial burden on top of your new loan.

The biggest drawback to borrowing against the value of your home is that you're using your home as collateral. If you can't repay the new home loan, you risk going into foreclosure and losing the roof over your head.
however, with the right repayment plan and expectations, cash-out mortgage refinancing can be a way for you to tap into your home's value when you need it most. Get in touch with a knowledgeable loan officer at Credible to learn more about cash-out mortgage refinancing and determine whether it's a good option for you.