A bridge loan is a short-term financing option that provides immediate cash to cover a gap between the purchase of a new asset and the sale of an existing one, often used by homeowners to buy a new home before selling their current one. These loans are typically secured by collateral, such as real estate, and have higher interest rates and fees due to their short terms and the risk involved. Bridge loans offer flexibility and speed, allowing borrowers to avoid missing out on opportunities or rushing the sale of their property.