Supermarket and frozen food favourite Iceland are offering small loans to customers to help pay for their food shopping. The rate of inflation is at the highest it has been in 40 years, and the cost of living is causing a huge strain on the pockets of households nationwide.
In a move to help customers pay for essential food shopping, these loans are between £25 and £75. This is operated by charity owned lender Fair For You. These loans can be accessed through the Iceland Food Club.
Customers can request up to £75 in these loans. However, they must be paid back at a minimum rate of £10 weekly. There is also a maximum credit allowance of £100 at any given time. When customers have been approved for this loan, it will be put onto a Food Club card.
The Food Club card allows you to pay for your food shop online, in store and at Iceland’s sister company The Food Warehouse.
As is the case with most loans, interest rates apply to the loan. The managing director of Iceland, Richard Walker, has explained that a £75 loan repaid over a total of eight weeks, a minimum repayment of £10 per week, will incur interest of approximately £2.89. Similarly, £25 borrowed would see you paying 40 pence in interest.
According to Fair For You, the interest rate payable is 45 per cent, equivalent to 55.6 per cent APR.
Although this is a good, short term solution in times when people may have to choose between heating or eating, there are other ways to help pay for the ever-rising costs of food. Caution must be taken with loans, as it could lead to struggling to pay for other daily essentials. In worse cases, it could lead to debt.
Contact your local council if you are struggling to feed yourself, your family or other loved ones. They may have grants and support packages available to help those who are vulnerable or on very low incomes. Some councils are also giving food vouchers to people to help them stock their cupboards.
Make sure you are aware of any foodbanks in your local area. Similarly, apps such as Olio and Too Good To Go can provide good food for very low prices. Sometimes, even for free.
Simon Dukes, CEO of Fair for You, said:
“Whilst some people are dependent on grants for food, many families are struggling to put food on the table in school holidays and either don’t wish to go to food banks or are ineligible.
“An independent social impact report shows that Food Club provides a lifeline for these families. Food Club can only be used a few times per year and therefore can not be used as an ongoing, long-term way to buy food. Affordability checks are run to ensure micro credit is offered only to people who can demonstrate a means of repaying. Fair for You, as a charity-owned lender, provides support and flexibility to help customers make repayments.”