In order for someone to switch from borrowing to saving when the interest rate falls, it must be that current consumption is an inferior good.

Question

Quizplus · Accepted Answer

The decision to switch from borrowing to saving when the interest rate falls is primarily influenced by the individual's time preference for consumption and the relative attractiveness of saving versus borrowing. It does not necessarily imply that current consumption is an inferior good. People might save more when interest rates fall due to increased incentive to save for future consumption or decreased cost of saving compared to borrowing.

In Order for Someone to Switch from Borrowing to Saving