Bridge loans are popular in real estate markets. A bridge loan is a type of short-term loan, typically taken out for a period of two weeks to two years.

The reason buyers use a bridge loan is to buy another home before selling an existing residence. This type of financing allows the user to meet current obligations by providing immediate cash flow.

A bridge loan is a viable option if the selling and purchase dates do not coincide. Banks in India allow repayment of the interest in monthly installments while the principal amount of the bridge loan needs to be paid as a lump sum at the end of the term.