A hearing to discuss the auction is scheduled for Wednesday

ELVIS Presley's historic Graceland home is set to be sold at auction after his daughter allegedly failed to pay back a $3.8million loan.

The property is due to be sold to the highest bidder on Thursday - but his granddaughter is trying to halt the court-approved sale.

Presley's granddaughter - actress Riley Keough - claims the company behind the foreclosure auction has no right to it, local CBS affiliate WREG reports.

Naussany Investments and Private Lending claim Keough's mother, Lisa Marie Presley, took out a $3.8million loan in 2018 and used Graceland as collateral.

It claims Lisa Marie signed a Deed of Trust to secure the loan - and alleged she never paid the debt back before her death at the age of 54 last year.

But Keough - the sole heir of Graceland - argues the loan is fake and insists it was not executed by her mother.

"These documents are fraudulent," Keough's lawsuit, filed May 15 in Shelby County Chancery Court, states.

She claims the signatures on the deed are forged and alleges that Naussany Investments is not a real entity.

In the lawsuit, she claims the lawyer involved in the deed has denied verifying Lisa Marie's signature or ever meeting her.

A temporary restraining order to halt the sale was granted by the court on Monday and an injunction hearing is set for Wednesday. 

In a statement to NBC News, Elvis Presley Enterprises - the group that runs Graceland and the assets of the Elvis Presley Trust - said the "claims are fraudulent".

It said: "There is no foreclosure sale. Simply put, the counter lawsuit has been filed is to stop the fraud."