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We're the Consumer Financial Protection Bureau (CFPB), a U.S. government agency that makes sure banks, lenders, and other financial companies treat you fairly.

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What does it mean to renew or roll over a payday loan?

Answer: Generally, renewing or rolling over a payday loan means you pay a fee to delay paying back the loan. This fee does not reduce the amount you owe. You will still owe the principal and fees for the rollover.

Some payday lenders give borrowers the option to renew or rollover their loans if they cannot afford to pay off the loan when it’s due. However, many states limit or ban these renewals or rollovers.

If your loan is renewed or rolled over instead of being repaid in full on its due date, you are paying a fee to extend the loan due date. Renewing by paying just the fees does not reduce the principal amount you owe.

For example, on a typical payday loan, if you borrowed $300, you may owe $345 in 14 days-- $300 plus the $45 fee. If you roll over the loan, you pay only the $45 fee, and you have to repay the $300 plus another $45 fee 14 days later. That means the cost of the original $300 loan, due to the rollover, has gone from $45 to $90. 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.

If you are having trouble paying off your payday loan, see I am having trouble repaying my payday loan.

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