Hanoi, May 27: With gold prices reaching VND92.4 million (US$3,629) per tael, many borrowers who took gold loans are finding themselves in dire straits as their debts have skyrocketed.
Hong Hanh, a 41-year-old resident of Cau Giay District, borrowed 10 taels of gold from her sister in 2016 to buy a house. At the time, gold was priced at VND35 million per tael, and she planned to repay the debt within five years. However, the COVID-19 pandemic disrupted her plans, forcing her to extend the repayment deadline.
In March 2024, her sister requested repayment, but Hanh could only pay half the debt with VND500 million in hand. “We’ve been on pins and needles for the past two months. We keep waiting for gold prices to drop, but they keep hitting new records,” Hanh lamented.
Doan Son, 33, from Hoang Mai District, borrowed 10 taels from his uncle at VND5 million interest per month to buy an apartment at the end of 2023. However, with property prices rising since early 2024, he still hasn’t purchased an apartment. He faces a dilemma: if he returns the borrowed gold, he loses the interest already paid and the opportunity to buy property. If he sells the gold to buy an apartment, he might not be able to repay the debt in gold due to its rising price. Son constantly monitors gold prices, feeling increasingly anxious as they rise.
Dr. Ngo Tri Long, a former director of the Institute of Market and Price Research, attributes the gold price surge to global instability and economic uncertainty. Gold is seen as a safe haven during troubled times, and this year it has gained 22%, outperforming other asset classes like stocks, bonds, and cash.
In May, SJC gold surged past VND92 million per tael, reaching an all-time high before dropping to VND89.7 million ($3,522.76) per tael on Monday.
Mai Ly, 38, from Nam Dinh Province, is in conflict with her brother over a gold loan. In 2010, she borrowed eight taels from him, amounting to VND288 million at the time. She has been paying VND2 million in monthly interest. Recently, Ly sold some land and repaid her brother VND288 million, but he demanded repayment in gold. Their disagreement has led to familial strife.
The issue of gold loans has sparked debate on social media, with many arguing that debts should be repaid in the form they were taken. A man named Vinh Nguyen commented, “You only risk disappointment if you say no to a loan request. But if you say yes, you might lose both your assets and the relationship.”
