Magnetic nanoparticles can potentially be used in drug delivery systems and for hyperthermia therapy. The applicability of $Fe_3O_4$, $CoFe_2O_4$, $MgFe_2O_4$, and $NiFe_2O_4$ nanoparticles for the same was studied by evaluating their magnetization, thermal efficiency, and biocompatibility. $Fe_3O_4$ and $CoFe_2O_4$ nanoparticles exhibited large magnetization. $Fe_3O_4$ and $NiFe_2O_4$ nanoparticles exhibited large induction heating. $MgFe_2O_4$ nanoparticles exhibited low magnetization compared to the other nanoparticles. $NiFe_2O_4$ nanoparticles were found to be cytotoxic, whereas the other nanoparticles were not cytotoxic. This study indicates that $Fe_3O_4$ nanoparticles could be the most suitable ones for hyperthermia therapy.