I am in the process of giving a loan to a business associate. However, as I was not convinced completely on their ability to pay back, I have asked for a collateral in excess of the loan amount. The associate has a property worth significantly more than the loan amount which they are willing to put up as security. However, since I am not an NBFC or a bank, what sort of documentation can I use to secure myself in the event of Non performance by my associate.
Will taking an irrevocable power of attorney for the property, in my name suffice? Should I get the property transferred to my name? I would prefer a solution where I do not have to transfer ownership of the property into my name as it will incur various charges such as Service Tax and stamp duty.