VPN is a virtual private network used mainly in corporate sector in which a virtual tunnel is created across the public network in order to hide the communication going on in private network for the security purpose. the reason of using VPN is if someone intruding in the virtual path, VPN blocks that path and create another one automatically. You can also configure encryption on the VPN plane to the packets in order to add more security named as IPsec VPN.
There is two type of VPN extranet and intranet.
Another use of VPN is remote access, you can use the private resources of your company through VPN like you are sitting in your office and accessing your file.