It shall be noted that in the AD-AS framework, as the aggregate demand (AD) curve shifts to the left, the equilibrium price level and real GDP both fall.
A fall in the AD indicate increase in the public & private savings.
The increased savings are ploughed in the loanable fund market and hence, the supply of loanable funds are shifted to the right indicating an increase in the surplus funds for lending purpose.
With the fall in the price level, the firms perceive the situation as low inflation or deflation in the economy. This acts as the dis-incentive to increase production, as the scope for making increased profit reduces when the economy is witnessing fall in the price levels. Thus, demand for loanable funds also decreases and this is indicated by the leftward shift in the demand for the loanable fund curve.
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