A bridge loan is a type of short-term loan that is designed to provide temporary financing until a more permanent source of funding can be obtained. Bridge loans are often used in real estate transactions, such as when a buyer needs to secure financing to purchase a new property before they have sold their current one.
Bridge loans are typically for a relatively short period of time, ranging from a few weeks to a few months, and may have higher interest rates and fees than other types of loans. They may also require collateral, such as the property being purchased or the borrower’s existing property.
Bridge loans can be useful for borrowers who need to quickly access funds to complete a transaction, but they should be used with caution, as they can be expensive and may not be a long-term solution to financial needs. It is important to carefully consider the terms and conditions of a bridge loan before accepting one.