Rashi says that the word "chanun" always indicates asking for a "matnas chinam" (a free gift). He says that even though tzadikim have merits, they only ask for free gifts. This is as Hashem says (Shemos 33:19): "V'chanosi es asher achun. (I will favor and provide free gifts whom I want to favor.)" This is also stated in the Medrash (Devarim Rabbah 2:1) which cites these sources as proof that if doesn't have sufficient mitzvos or good deeds, he is given a free gift.
Rav Yaakov Aryeh of Radzimin zy"a (quoted in Sefer Bikurei Aviv, Michtav Kodesh) asks how one who doesn't deserve anything could have the audacity to ask for a free gift. He answers that when one realizes that he deserves nothing, and all his efforts to serve Hashem are worthless, his heart will break inside him. Since Hashem never refuses a broken heart, he can then ask for a free gift.
In this vein, the Shem M'Shmuel writes in the name of his father, the Avnei Nezer zt"l, that if one recognizes that he deserves nothing, and he relies solely on his tefillos to Hashem, in this merit he is given a free gift.
