Employers of more than 100 workers may soon be required to fire those who refuse to be vaccinated against the coronavirus or agree to undergo regular COVID-19 testing once a vaccine mandate from the Biden administration’s employer will come into force.
Several large companies have already started deploying their own mandates or implementing local or state-level vaccine mandates. More than 100 Colorado hospital workers have been fired for refusing to be vaccinated against COVID-19. And despite labor shortages, major U.S. and Southwest commercial airlines may soon be forced to lay off their unvaccinated staff.
Moreover, it is not clear whether workers made redundant for non-vaccination will be entitled to unemployment benefits.
The Unemployment Insurance (UI) program provides cash benefits to unemployed Americans. To be eligible for Unemployment Insurance benefits, you must be unemployed through no fault of your own, or “for good cause” – in most cases that means being laid off for lack of work. available.
But like many aspects of the vaccine’s mandate, questions surround its impact on UI benefits. It is not clear whether refusing to be vaccinated would make an employee not comply with company policies, or whether mandatory vaccinations are a reasonable policy in the first place.
It can also depend on what state you live in. While lawmakers in some states are introducing their own vaccine requirements, others are working to ban vaccination mandates altogether.
If you have been denied unemployment benefits, either for refusing to get the vaccine or for some other reason, there are several ways you can compensate for lost income. Depending on your financial situation, you might consider taking advantage of your early retirement, leveraging your home equity, or borrowing a personal loan.
Consider your options in the sections below and visit Credible to compare interest rates on a variety of financial products to ensure you are getting the best possible interest rate for your situation.
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3 ways to borrow money if you’re not eligible for unemployment
Your financial obligations don’t end only when you’re unemployed, and it can be difficult to pay bills and cover basic expenses without an income. You also don’t want to rack up high interest credit card debt or take out a predatory payday loan just to top up your bank account.
If you have been denied unemployment insurance benefits and need the money now, consider the following types of loans:
- Unsecured personal loans
- 401 (k) loans
- Mortgage refinancing in cash
While borrowing cash loans might not be your first choice, it can be an effective way to tide you over while you search for a new job. Evaluate your borrowing options in the sections below.
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1. Take out an unsecured personal loan
Personal loans are lump sum loans that you pay off in fixed monthly payments over a set period of time, usually a few years. Personal loans are generally unsecured, which means that they do not require you to post an asset that you own as collateral.
Since unsecured personal loans do not require collateral, lenders determine eligibility and set interest rates based on your likelihood of paying off the loan in full. They will take into account factors such as your credit history and your debt-to-income ratio, which is your annual income versus the amount of debt on your behalf.
In addition to your employment income, however, personal lenders may also consider another source of income such as Social Security benefits, alimony, and child support. So even if you are 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 shopping with a credit card with high interest rates and additional fees. Compared 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, compared to 17.13% for credit card accounts rated at interest.
Plus, personal loans offer quick cash funding. If you have good credit and meet the eligibility requirements, you may be able to access the funds the next business day after loan approval.
Visit Credible to see your estimated personal loan rate and loan options without affecting your credit score.
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2. Borrow from your retirement savings
When you’re struggling to manage financially, you might consider dipping into the money you’ve saved in your retirement account. Many retirement plans allow you to borrow cash loans from your own nest egg, called a 401 (k) loan. Since you are borrowing from your own retirement account:
- You don’t need a credit check
- Interest rates are relatively low
- Your repayment terms are flexible
However, withdrawing money from your retirement savings comes with its share of risks. If you do not repay the loan within a specified time, you may have to pay an early withdrawal penalty in addition to the late fees assessed for non-payment. And some pension plan providers require that you are still currently employed, which can make this a dead end option for some borrowers.
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3. Use cash-out mortgage refinancing
When you are unemployed and need cash now, there is another alternative to dipping into your emergency fund or accumulating expensive credit card debt – by taking advantage of the equity you have. accumulated in your home.
Mortgage cash refinancing involves taking out a larger mortgage loan to pay off your current home loan. Home equity is at record highs, meaning you may be able to borrow more than ever. Plus, mortgage rates are near their all-time low, which means you may be eligible for a lower rate than you are currently paying.
When considering refinancing 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 increase. Also, is it worth paying the closing costs? Mortgage refinancing costs, such as closing costs, are typically around 2-5% of the loan value, according to Credible, and are built into the total loan amount. However, this can be an additional financial burden on top of your new loan.
The biggest downside to borrowing against the value of your home is that you are using your home as collateral. If you can’t pay off the new home loan, you risk being foreclosed and losing the roof over your head.
Still, with the right repayment plan and the right expectations, mortgage refinancing can be a way for you to take advantage of your home’s value when you need it most. Contact a knowledgeable loan officer at Credible to learn more about mortgage refinancing with withdrawal and to determine if this is a good option for you.
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