Bridge Loan Meaning

Bridge loan as the name suggests is a type of loan which bridges the gap for a borrower and gives him or her more time to arrange for the cash in order to repay the loan or meet his or her current obligations. It can be better understood with the help of an example suppose you are in a college and its 25th of a month, now you need urgently $200 but your pocket money will come only on 1st of next month, than in that case you would borrow $200 from your friend and repay it next month when you receive your pocket money.

Big companies and individuals in real life do the same as in the above example, the only difference being they take it from the banks or financial institutions which charges interest on such loans and the amount is quite large and not as small as in the above example.

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