Seller financing is a loan provided by the seller of a property to a potential buyer. The buyer will make a down payment to the seller and then pay the rest of the money, including the interest rates, in the form of Equated Monthly Installments (EMI). This is typically a transaction where the seller provides a loan to the buyer rather than approaching a bank. To the seller, this will be an investment in which the return will be guaranteed only by the buyers ability to pay back also known as their creditworthiness.

When it comes to normally procuring a home loan from a bank, the borrower would have to pledge his/her property as collateral. But when it comes to seller financing, there will be no need to pledge collateral. People who have low credit scores might not be able to get home loans from banks. So seller financing might be an easier option as the buyer might be more likely to sell their property even though you have a low credit score. It depends on the terms you have with the owner. For example, if the seller is a family member or a friend it will be easier to make transactions.