The pandemic has brought down interest rates globally, but before you go out and borrow money, it's essential to understand which interest rate has changed.
Interest rates generally refer to the cost of borrowing. Say you lend $100 to your friend, and he/she/they return $105. Then the extra $5 amounts to an interest rate of 5%. Before giving a loan, or taking one for that matter, it is the real interest rate you need to look out for (no pun intended).
The real interest rate is the amount of extra purchasing power lenders must be paid for the rental of their money. It is adjusted for expected changes in the price level (aka inflation). The interest rate you read about in the newspaper is often the nominal interest rate - which does not account for inflation. Consider a situation where you have made a one-year loan with a 5% interest rate (nominal) and expect prices to go up by 7% by the end of the year. As a result of making the loan, you will end up losing 2% in real terms.
Here is a famous equation to help you out: r (real interest rate) = i (nominal interest rate) - pi (expected inflation). You just learned a foundational piece of intermediate macroeconomics known as the Fisher equation in less than a minute!
Tl;dr: When real interest rates are low, it's time to borrow. When they are high, then you are better off lending.
Also, if you are wondering how inflation is calculated, we have got you covered in a previous dose here.