Droom, an online marketplace for automobiles, has unveiled its marketplace to get auto loan for used automobiles by launching Droom Credit, which an end-to-end online and fully automated credit marketplace to get loan approval in 30 seconds with its own proprietary credit risk engine, unbeatable credit terms, paperless process, and fully automated work-flow management.
The Gurugram based startup claims that buyers and sellers would get multiple benefits from the platform.
“Getting finance for used vehicle is a nightmare. It requires a high level of paperwork, rejection and interest rate. Hence, we wanted to make auto loan process very smooth, affordable, efficient and paperless," Droom founder and CEO Sandeep Aggarwal said.
As part of the initiative, Droom has tied up with several commercial banks, NBFCs, and other financial entities such as the Tata Capital, Faircent, Kotak and HDFC with its initial service rollout.
Droom Credit will, however, act only as a platform and the interest rates will be decided by the financial institutions.
Depending upon the credit history, geographical location and a few other factors, buyers may avail discount on interest rates," Aggrawal claimed.
“Lenders will compete with each other to provide loans. For instance, if market rate in 14 per cent, a buyer can avail 13 per cent rate on Droom credit,” he added.
He further added that market for used cars will grow manifold in a few years and Droom is working to provide a 360 degree solution to the market.
Aggarwal said: “Currently, the new car to used car sales ratio of 1:1.4 compared to 1:3 in the developed markets. We expect it to become 1:2.8 by 2020. Market share of organised sector in the used-car market estimated to grow from the current 15-20 per cent to 30-40 per cent over the next four to five years while two-wheeler used market is still fully unorganised. We are trying to fill these gaps.”
It took almost 10 months and a couple of million dollars for Droom to develop Droom Credit. Going forward, Droom will continue to invest in the platform to keep it relevant with changing times.
Aggarwal also informed that Droom will invest 4-4.5 per cent of its GMV on marketing related activities.
Droom recently became the largest auto portal in India in terms of annualized GMV, monthly traffic and number of auto dealers on the platform. The 2014-founded startup has now annualized run rate of 2,500 crore in annualized GMV, over 15 mil in monthly traffic and over 1,05,000 auto dealers.
BW Reporters
The author is Senior Correspondent with BW Businessworld
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