Passive income made easy: earn money without effort with crowdlending!

In a world in which financial independence and the generation of passive income are becoming increasingly important, innovative forms of investment are taking centre stage. Crowdlending is a particularly interesting method. In this article, we explain how to generate passive income with the help of crowdlending and carry out a sample calculation for a budget of CHF 25,000.

What is crowdlending?

Crowdlending, also known as peer-to-peer lending or marketplace lending, is a form of lending in which private individuals or companies receive loans directly from investors without going through traditional banks. Platforms such as LEND act as intermediaries between borrowers and lenders. Investors can invest their money in various loans or mortgages, build up a diversified portfolio and thus generate passive income.

How to generate passive income with LEND

The path to a regular monthly income is very simple: register as an investor and then put together a portfolio of loans and mortgages. If you don't want to build up your portfolio manually (i.e. you really do take passive literally), you can configure RoboInvest once. It then takes care of your portfolio and automatically invests in suitable loan projects. The very next month, the interest from the projects will flow into your account, as will the first repayments (‘amortization’).

A high level of diversification is recommended – i.e. investing in as many loan projects as possible and in different loan types and scores. This minimizes the default risks, which are historically extremely low with LEND anyway – see statistics. If you want to select the projects yourself, you have access to detailed information on the borrowers.

In your own lender dashboard, you can then see how much return is being generated and how your own income is growing. Very importantly, we show a return after costs – and these costs are very low compared to most investment options. Thanks to the compound interest effect, passive income increases steadily with recurring new investments.

Sample calculation: How much passive income can you expect with CHF 25,000?

To illustrate the potential income from crowdlending, let's look at an example with an investment budget of CHF 25,000 and an average interest rate of 5 % per year after all costs.

Initial data Example 1:

• Investment amount: 25,000 francs

• Average interest rate: 5 % p.a.

• Term: 5 years, capital plus interest are reinvested

After five years, the investment would have reached a value of approx. 31,907 francs. The profit therefore amounts to:

CHF 31,907 - CHF 25,000 = CHF 6,907

Or to put it another way: an average of around CHF 1,381 per year or an average of CHF 115 in passive income per month.

Another option would be to leave the investment amount for 20 years and always reinvest the interest. Only at the end of the 20 years can the interest be paid out:

Initial data Example 2:

• Investment amount: CHF 25,000

• Average interest rate: 5 % p.a.

• Term: Interest and repaid instalments (capital) are invested again and again for 20 years

After 20 years, the investment would have experienced an immense increase in value. An impressive CHF 66,332.44 is now invested in loans. If you let it continue to work and only pay off the interest each month, you will have an average regular passive income of around CHF 276. And the profit of more than CHF 40,000, which continues to earn interest now and which you can, of course, have paid out at a later date!

Is crowdlending suitable as a passive income?

The examples show: Crowdlending can be an ingenious way to generate passive income. A positive side effect: you support people and exciting projects in Switzerland at the same time!

So if you are looking for an alternative form of investment for passive income, crowdlending from LEND is an exciting and lucrative option.

A Swiss bank account is required to become an investor.

A practical example: Edouard Blanc talks about his ‘passive income’ strategy

Edouard Blanc was the national coach of the Swiss rowing team for many years and took part in the Olympic Games in Rio 2016 and Tokyo 2021. In our German-speaking podcast ‘Rendite ohne Drama (Yield without drama)’, he shares his experiences and his strategy for passive income through investments on LEND with our founder Florian Kübler, in addition to exciting insights into the sport of rowing. He currently achieves a return of 3 to 5 % per year with his loan portfolio. However, he is not only happy about the solid return, but above all about the freedom he has gained to travel carefree and increase his wealth at the same time. He is currently travelling the world in a motorhome.