Let's start with the term 'APR' which stands for Annual Percentage Rate. Simply put, if you take out a loan with a company, the APR is a calculation of the annual charges you would need to pay, if you took out a loan for a year or more. These are relatively low for longer-term loans because the interest is much lower in the long-term, but much higher for short-term loans, as these aren't intended to last as long as a year.

The 'representative' part simply means that the majority of customers who took out a loan with that company, had an APR of that amount. With short-term loans, whilst many customers would not have paid this much back because they didn't have the loan for a year, it is an annual figure. Showing the representative APR is required by law when offering certain financial products, despite most people being unsure as to what it is. Hopefully by the end of this article, you'll understand in more depth about what representative APR means and how it affects you.

The APR is perhaps more valuable for loans or mortgages that will last for a number of years, as this represents what the charges would be each year. As short-term loans are designed for a much short period, the APR looks much higher but actually would look very different if you calculated it for just a half year or for a few months.

In the UK, new rules and regulations for payday loans means that the interest and charges should be no more than 0.8% of the overall loan each day. So if you took out a payday loan of £100 for one month, you would expect to pay 0.8% per day (80p per day). Over the course of the month, the loan should then cost you no more than £24 in fees and charges. The monthly rate here would be 24%, compared to the 1,000% that is shown for annual rates. Of course, if you took out a £100 loan for a year, at 0.8% per day, paying back only the interest until the final month, this would be a total charge of £292, on top of the £100 you had to repay.

• APR stands for Annual Percentage Rate, and is the amount of interest you would pay if you borrowed a sum of money from a lender for a full year
• 'Representative' simply indicates that the majority of customers had this APR with their loan
• It is require by law when offering certain financial products
• It may be considered more relevant for much longer-term loans, however, it does give customers an indication of how much interest they would pay if they took out a loan for a year.

In August, the BBC launched a new documentary, hosted by Anne Robinson, detailing the secret spending habits of people up and down the UK. Throughout the series Robinson meets Brits in a wide range of situations, looking at billionaire spending right down to where the poor and homeless find their next meal.

It's an insightful documentary, and highlights how people value money so differently, despite it being one common currency. We all have our vices and we perhaps often spend more on certain things than we should, often causing us to rack up debts that can spiral out of control, like Charlotte in episode one, a single mum who aspires to the celebrity lifestyles she reads about on a daily basis, yet her only income are the benefits she receives from the state.

The idea behind the documentary comes as more and more people are getting themselves into debt and/or struggling with day-to-day lifestyle costs. Robinson looks at the nitty gritty of where we spend our money and how we value the things we have and don't have.

In episode two, Anne meets John Caudwell, one of the richest people in the UK, discovering whether he is one of the happiest men in the UK, seeing as money is supposed to buy you happiness, along with a number of other Brits who waste wildly or are spend savvy.

Be sure to check out the next episode on Wednesdays at 9pm on BBC One and see how much you can relate to.