How are Gold Loan Interest Rates for 2026 Calculated?

Are you in urgent need of funds to cover unexpected expenses? Borrowing gold could be a quick and convenient solution. However, how can you borrow gold safely and effectively? What is the current gold loan interest rate? Let's explore information about borrowing gold in the article below from Jemmia!

What is borrowing gold?

Borrowing gold is a form of borrowing assets in gold between individuals or organizations. When borrowing gold, the borrower receives a certain amount of gold and commits to returning the same type and quantity of gold at the agreed-upon time, or it can be converted to money along with a certain gold loan interest rate.

In reality, in close relationships such as family or friends, lending gold often occurs without clear agreements on terms like interest payment dates, applicable interest rates, or interest payment methods. Since gold prices can fluctuate due to various factors, determining gold loan interest rates becomes complex and difficult, leading to many disputes and lawsuits, damaging relationships and trust between parties.

See more: What is the Gold Pawn Interest Rate in 2024? How to Calculate the Standard Gold Pawn Interest Rate

Is borrowing gold legal?

Firstly, loan transactions are a completely legal civil transaction according to the provisions of Article 463 of the Civil Code 2015:

“A property loan contract is an agreement between parties, whereby the lender hands over property to the borrower; upon maturity, the borrower must return property of the same type to the lender in the correct quantity and quality and must pay interest only if there is an agreement or the law stipulates it.”

Secondly, gold property loan transactions are fully compliant with current legal regulations. Prohibited acts in gold-related transactions are stipulated in Article 19 of Decree 24/2012/NĐ-CP as follows:

“Violations of legal regulations in gold business activities include:

1. Activities of producing jewelry and fine art gold without a business eligibility certificate issued by the State Bank.
2. Activities of buying and selling gold bars; exporting and importing raw gold without a license issued by the State Bank.
3. Individuals carrying gold when exiting or entering the country exceeding the prescribed limit without a license issued by the State Bank.
4. Using gold as a means of payment.
5. Activities of producing gold bars contrary to the provisions of this Decree.
6. Other gold business activities without permission from the Prime Minister and a license from the State Bank.
7. Violations of other regulations in this Decree and other related legal provisions.”

From this, it can be seen that lending gold between individuals is completely legal. This is a form of civil property loan contract. You are free to lend your gold, as long as the gold has a legal origin and does not violate regulations on large-scale gold business.

What is the legal interest rate for borrowing gold?

As of now, there is only one interest rate applied to gold lending transactions, which is 7%/year, announced by the Governor of the State Bank (SBV) in 1992. This interest rate was applied until 2000, when the Governor of the SBV revoked the 1992 decision and did not issue new regulations on gold loan interest rates. Therefore, from that period to the present, there is no basis to apply the 7%/year interest rate in resolving disputes related to gold loans.

In addition, according to Article 468 of the Civil Code 2015:

“Article 468. Interest rates

• Loan interest rates are agreed upon by the parties.

If the parties agree on an interest rate, the agreed interest rate must not exceed 20%/year of the loan amount, unless other relevant laws provide otherwise. Based on the actual situation and upon the proposal of the Government, the Standing Committee of the National Assembly shall decide to adjust the above interest rate and report to the National Assembly at the nearest session.

If the agreed interest rate exceeds the limit specified in this clause, the portion exceeding the limit is invalid.

• If the parties agree on interest payment but do not specify the interest rate and there is a dispute over the interest rate, the interest rate shall be determined as 50% of the limit specified in clause 1 of this Article at the time of repayment.”

Based on the principle of calculating interest, if the loan asset is money, the lender can apply an interest rate of 20%/year. However, gold is not money and falls under the category of “other relevant laws providing otherwise,” thus requiring specific legal provisions to determine the gold loan interest rate. As analyzed in the article, there are currently no regulations governing this matter.

See more:

• Guide to Buying Gold Online Through the Most Reputable Apps Today
• Where to Buy SJC Gold? List of Selling Points in Ho Chi Minh City and Hanoi
• What is Gold Buy Price and Sell Price? The Difference Between Gold Buy and Sell Prices

In practice, many courts have valued gold in monetary terms and applied interest rates accordingly. However, if such conversions are made, should the price of gold at the time of the loan or at the time of dispute resolution be used as a basis? Moreover, applying the law in this manner might be considered arbitrary and unreasonable. 

Conversely, if interest on gold loans is not resolved, the rights of the borrower may be infringed. According to the fundamental principle of the Civil Procedure Code 2015, “Courts shall not refuse to resolve civil cases due to the absence of applicable legal provisions,” thus there is a risk of inconsistency in the court's judgments.

Should you borrow gold?

To protect their rights, borrowers and lenders should clearly agree on the method of calculating interest rates in the loan contract from the outset. Specifically, the contract should clarify the gold price at the time of lending, the time of interest calculation, as well as the method of interest payment. This way, in case of a dispute, there will be a clear basis for resolution.

In Jemmia's opinion, interest should be calculated based on the gold value at the time of lending until the debt is fully repaid, and interest rates should not be determined based on gold values at other times. This approach will ensure the rights of both borrowers and lenders, while avoiding complications during dispute resolution.

Currently, there are no specific legal provisions for calculating interest rates on gold. Therefore, when engaging in gold lending transactions, everyone should be mindful to avoid potential future disputes.

Thus, although there are no specific regulations on gold loan interest rates, agreeing on interest rates between lenders and borrowers is completely legal. However, to avoid disputes and ensure the rights of both parties, a clear loan agreement should be established. Follow Jemmia for more information on gold and gemstones like diamonds.