Bridge loans are short-term loans designed to bridge a financial gap, often used in real estate transactions. They provide temporary funding until a more permanent financing option becomes available. These loans can be useful for individuals or businesses looking to quickly secure a property or investment while waiting for longer-term financing arrangements to be finalized. However, they typically come with higher interest rates and should be carefully considered before taking on, as they can be risky if the exit strategy for repayment is uncertain.