A bridge loan is very much as it sounds-a loan that bridges the gap between the financing of a home purchase and the sale of the current home. Bridge loans are used in situations when a buyer's home hasn't sold and the equity from the sale is to be used as all or part of the down payment on the new home. One of the benefits of a bridge loan is that the buyer has the freedom to make an offer that isn't contingent on the sale of the current home.