What does it mean to renew or roll over a payday loan?
Generally, it means you pay a fee to delay paying back the loan. This fee does not reduce the amount you owe. If you roll over the loan multiple times, it’s possible to pay several hundred dollars in fees and still owe the amount you borrowed. For example, if you roll over a $300 loan with a $45 fee three times before fully repaying the loan, you will pay four $45 fees, or $180, and you will still owe the $300. So, in that example, you would pay back a total of $480.
Some payday lenders give borrowers the option to roll over their loans if they cannot afford to make the payment when it’s due. However, many states limit or ban payday loan rollovers.