IS IT LEGALLY PERMISSIBLE TO SETTLE A GOLD DEBT IN CASH?

In everyday life, asset borrowing is a common civil transaction aimed at meeting the capital and asset needs of organizations and individuals. While the subject matter of such loans is typically money, gold lending transactions have become increasingly popular. This is especially true in a market context where gold is considered a highly valuable asset for accumulation, capable of preserving wealth amidst economic fluctuations. However, due to the inherent nature of gold—an asset whose value fluctuates continuously over time—gold loans often entail significant risks and are prone to disputes regarding repayment obligations. Consequently, a key legal issue that arises is: Is the borrower of a gold loan permitted to repay the debt in cash?

In reality, there are many cases where, upon the due date of payment, the borrower is no longer capable of returning the exact amount of gold borrowed, or the parties change their intention regarding the payment method. Besides, the price of gold at the time of debt repayment may differ significantly from the time of establishing the asset lending transaction, leading to conflicts over the value of the borrowed asset. This greatly affects the lawful rights and interests of the parties in a gold lending transaction.

1. What is a gold lending transaction?

A gold lending transaction is one of the forms of asset borrowing that has appeared and exists in practice. From a legal perspective, current laws do not have specific regulations on the concept of each type of asset lending transaction, including gold lending transactions.

However, Clause 1, Article 105 of the 2015 Civil Code stipulates that assets include objects, money, valuable papers, and property rights. Concurrently, Article 463 of the 2015 Civil Code stipulates: “A contract for the loan of property is an agreement between parties whereby a lender delivers property to a borrower. When the loan falls due, the borrower must return the property of the same type, quantity, and quality to the lender, and must only pay interest if so agreed or provided by law”.

Therefore, it can be understood that although the law does not have specific provisions on “Gold lending transactions”, gold is determined as a type of asset and a gold lending transaction is a specific form of an asset loan contract, in which the subject matter of the loan contract is gold - an asset determined by type, weight, and content.

It can be seen that, according to Civil law, a gold loan contract is not an independent type of contract but is subject to the general regulations on asset loan contracts for a specific subject matter, which is gold. The legal nature of this transaction is manifested in the lender transferring ownership of a certain amount of gold to the borrower; in return, the borrower is obliged to return to the lender an amount of gold of the same type, equivalent in quantity and quality upon the due date.

2. Is it permissible to execute a gold lending transaction?

As analyzed above, a gold lending transaction is essentially a specific transaction form of an asset loan contract under the provisions of Civil law. Furthermore, based on the provisions in Clause 1, Article 4 of Decree 24/2012/ND-CP dated April 3, 2012, organizations and individuals are recognized and protected by law regarding their lawful gold ownership rights. When an organization or individual has lawful ownership rights over gold as an asset, they will automatically have the rights to possess, use, and dispose of the asset in accordance with the law (Legal Basis: Article 158 of the 2015 Civil Code). Concurrently, the current law does not contain any prohibitory provisions regarding the act of executing gold lending transactions.

Thus, the lawful owner of gold assets is entirely permitted to participate in gold lending transactions.

3. When establishing a gold lending transaction, can the loan be repaid in cash?

Based on the provisions in Clauses 1 and 2, Article 466 of the 2015 Civil Code regarding the borrower's repayment obligations in an asset lending transaction, it can be understood that if the asset is gold, the borrower must return gold of the same type in the exact quantity and quality, unless otherwise agreed; in case the borrower cannot return gold, they may repay in money based on the value of the borrowed gold at the place and time of repayment, if consented to by the lender.

At the same time, according to the guidelines in question 31 of Official Letter No. 250/TANDTC-PC dated April 28, 2026, on announcing the results of online responses to a number of difficulties in adjudication work, in cases where the subject matter of the asset lending transaction is gold, the Court must compel the borrower to return to the lender the borrowed amount of gold, unless there is another agreement ensuring compliance with legal regulations. Regarding the determination of court fees and procedural costs in this case, the Court will still convert gold into money at the market price at the time of the first-instance trial to calculate court fees and procedural costs.

Therefore, for a gold lending transaction, the borrower is obligated to return the loan in gold of the same type, in the exact quantity and quality to the lender. The borrower's repayment of the loan in money can still be legally recognized if consented to by the lender.

4. Determining the obligation to pay late payment interest for gold lending transactions:

According to the guidelines in question 31 of Official Letter No. 250/TANDTC-PC dated April 28, 2026, on announcing the results of online responses to a number of difficulties in adjudication work, the obligation to pay late payment interest is determined as follows:

It can be seen that determining the obligation to return gold or money in a gold lending transaction cannot be established absolutely. Because the repayment of a loan in money is still feasible but must be considered based on the content of the parties' agreement, the nature of the loan obligation, and the provisions of current Civil law. Determining the property obligations for gold lending transactions plays an important role in resolving disputes arising in practice objectively, fairly, and in accordance with the will of the subjects participating in the transaction.

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