A low interest rate encourages people to borrow because interest rates are paid to savers by borrowers, so a low interest rate means a low opportunity cost for borrowing.
When interest rates are low, the cost of borrowing decreases, making loans more attractive for consumers and businesses. This often leads to an increase in borrowing for purposes like buying homes, financing education, or funding projects, as the repayments on loans become more manageable. Conversely, lower interest rates typically result in lower returns on savings, which can discourage saving, as individuals might seek better financial returns elsewhere.