Grain app review: Small lines of credit with no credit score requirement

Woman on the street looking at her mobile phone.Image: Woman on the street looking at her mobile phone.

In a Nutshell

The Grain app offers you a line of credit even if you have low credit scores or limited credit history. You can transfer the money directly into your existing bank account to spend as needed.
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Pros

  • No credit score requirements
  • Connects to your existing bank account
  • Lower interest rate (with autopay) than most credit cards

Cons

  • Multiple fees may apply
  • A security deposit may be required
  • Relatively low credit limits
  • Not available on Android

What you need to know about the Grain app

The Grain app allows you to borrow money for day-to-day expenses while still only using your current checking account and debit card. Intended to help people build their credit, Grain is essentially an alternative to a credit card. The amount you can borrow is based on your cash flow. You can transfer this money into your checking account through the app to spend as you usually would, and then pay it back at the end of your billing cycle every month. 

To avoid paying interest, aim to pay your statement in full by your statement due date. Paying the full statement balance each month will have a positive impact on your credit

To use the service, you can use an Apple iPhone or tablet and download the Grain app from the App Store. It’s not currently available on Android.

No credit scores required

Many credit cards require good credit to qualify, and people with lower credit scores may face higher interest rates. Grain doesn’t require minimum scores or base its offerings on your credit history. You can build your credit scores over time by making on-time payments through the app.

Lower interest rate than most credit cards

Grain charges a flat 15% APR (if you use autopay), which is charged on balances following a 21-day grace period after your payment is due. According to Federal Reserve data, this is lower than the average credit card interest rate of 16.27% as of August 2022. People with little credit history or bad credit scores would likely face much higher interest rates on credit cards.

Multiple fees may apply

You’ll face several different kinds of fees when using Grain. First, you may need to pay a sign-up fee, which can range from $56.25 to $75, and then a monthly service fee based on your credit limit. You also pay a 1% fee whenever you access your credit line. Finally, avoid making late payments, as Grain charges 5% of your minimum payment (or $5, whichever is less) and it can negatively impact your credit.

A closer look at a Grain app personal loan   

  • Relatively low credit limits. The amount of credit you’re offered is based on your cash flow, but there’s currently a maximum credit line of $1,000. You may be able to increase this limit after six months of using the app.
  • A security deposit may be required. Before getting a line of credit, you may need to put up a certain amount of cash as a deposit. Grain doesn’t disclose on its website how much this might be.
  • Higher interest rate without autopay. If you choose to make all your payments manually, you’ll face a 17.99% APR.
  • Credits appear in your bank account quickly. Once you choose to use your credit line, Grain says the money may appear in your checking account instantly, though it may take up to one business day.

Who is the Grain app good for?

The Grain app may be a good option for people with low credit scores or short credit histories who have trouble qualifying for a credit card. Grain doesn’t have minimum credit requirements, meaning this app may give you access to a line of credit even if you can’t get one elsewhere. 

Grain also may work well for people who have steady, predictable income. That’s because Grain bases its credit lines on your cash flow, or how frequently and reliably you’re paid. 

How to apply with Grain

To get started with Grain, you’ll need to download the Grain app from the App Store on your Apple iPhone or tablet. Then, you connect your primary checking account to the service. Ideally, you’ll use the checking account where you receive your paychecks and make most of your regular payments. Grain uses your checking account history to make a credit offer. This process generally only takes a few minutes. At this point, you may be required to make a security deposit.

You’ll use the app to access the money if you’re approved and accept a credit offer. On the “Credit” tab, tap “Withdraw Credit” and select an amount. This money is transferred into your checking account. 

Not sure if the Grain app is right for you? Consider these alternatives.

  • Chime: If you don’t have a current checking account, Chime may be a good option. Chime offers fee-free checking accounts, the ability to overdraft up to $200 for free, and a credit-builder loan option.
  • Dave: The Dave app allows you to get up to $500 as an advance on your paycheck, with no interest charged.

About the author: Andrew Dunn is a veteran journalist with more than a decade of experience as a reporter and editor at North Carolina news organizations, including the Charlotte Observer and the StarNews in Wilmington. In those roles,… Read more.