Learners’ confidence in using a second language (L2 self-efficacy) and their L2 grit are key psychological factors in developing intercultural competence (ICC). As English as a foreign language (EFL) students increasingly encounter diverse cultures though informal digital learning of English (IDLE), this study examines whether IDLE serves as a pathway connecting these psychological traits to ICC. Grounded in the broaden-and-build theory, this explanatory mixed-methods research investigates how L2 self-efficacy and grit contribute to ICC through IDLE among 416 Chinese EFL students. Structural equation modeling revealed that higher L2 self-efficacy fosters greater L2 grit, which in turn promotes more frequent engagement in both receptive IDLE activities (e.g. watching English media) and productive ones (e.g. participating in online conversations). This increased engagement was positively linked to higher levels of ICC. Qualitative findings further illuminated the mechanisms behind this process, illustrating how psychological strengths support meaningful digital encounters across cultures. The findings offer pedagogical insights: by cultivating students’ self-efficacy and grit, educators can encourage deeper engagement in IDLE, thereby equipping learners with effective and culturally sensitive communication in an increasingly interconnected digital world.