---
title: "Rollover: definition | Desert Rock Capital"
url: "https://www.desertrockcapital.com/glossary/rollover"
description: "A rollover is extending or renewing a short-term loan that is not repaid on time, usually by paying a new fee to push the due date out."
---

Repayment & risk

# Rollover
All lending terms
Definition

A rollover is extending or renewing a short-term loan that is not repaid on time, usually by paying a new fee to push the due date out. It is most associated with payday loans.

A rollover, also called a renewal or extension, occurs when someone who cannot repay a short-term loan by its due date pays a fee to extend the term rather than paying off the balance. It is most commonly associated with payday loans, where the original principal generally remains outstanding while a new fee is added for the extension. Because each rollover adds cost without reducing the principal, repeated rollovers increase the total paid. Some jurisdictions limit or prohibit rollovers, and disclosure requirements may apply. An installment loan, which has a fixed repayment schedule and a defined end date, does not use rollovers.

Source: [Consumer Financial Protection Bureau](https://www.consumerfinance.gov/ask-cfpb/what-does-it-mean-to-renew-or-roll-over-a-payday-loan-en-1573/). This definition is general educational information, not legal or financial advice.
Related

- [Compare: vs. a payday loan](/compare/payday-loan)
- [Payday loan alternatives](/compare/payday-loan)
- [Signature loans](/services/signature-loans)
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