Traditional Lending Institutions Traditional Lending Institutions are typically made up of banks, credit unions, and financial institutions. Loan qualifications for traditional lending institutions tend to be more rigorous then Alternative lending sources; however, interest rates in most cases will be lower.
Alternative Lending Institutions Alternative Lending Institutions are typically non-profit organizations who work in congress with the traditional lending institutions. Loan qualifications for Alternative lending institutions tend to be a bit more liberal then traditional lending institutions. The result is that interest rates with Alternative lenders tend to have a higher interest rate, on average.