Tips & Tricks

Continue.dev setup for free AI coding in VS Code

2026-09-09 - ABikram Mondal

Why this extension fits busy Indian developers

Continue.dev runs inside VS Code as an open source extension. It connects to local models or free API keys without forcing a subscription. Many developers in India already use VS Code for daily work so the switch adds almost no new habits.

The tool supports autocomplete, chat and inline edits. You pick the model yourself instead of accepting one vendor choice. This matters when paid services raise prices or change terms suddenly.

Local models remove data sending concerns for sensitive client projects. API options stay available when you need more speed on a tight deadline.

Setup takes under thirty minutes on a decent laptop. No credit card is required to start testing.

Install the extension and basic config

Open VS Code and go to the Extensions panel. Search for Continue and install the official one from Continue Dev. Restart the editor once the install finishes.

A sidebar panel appears after restart. Click it to open the configuration file. The file is JSON so any text editor works if you prefer editing outside VS Code.

Add your preferred model under the models section. Start with a free tier option such as a local Ollama install or a provider that offers free credits.

Save the file and the panel updates immediately. Test by typing a comment in any file and triggering the chat.

Keep the config file in version control if you switch machines often. It travels with your dotfiles.

Connect a free model without paying

Run Ollama locally for zero cost inference on your own hardware. Download from the official site and pull a coding model such as codellama or deepseek coder. These run on modest GPUs or even CPU only setups.

Point Continue to the local endpoint in the config. The extension detects the running server automatically in most cases.

If local hardware feels slow switch to a free API key from providers that still offer limited daily requests. Check their current free tier page before committing time.

Never rely on one provider. Keep two configs ready so a sudden limit change does not stop work.

Local models respect privacy rules that some client contracts demand. API routes work when you need faster responses for quick prototypes.

Daily workflow that actually saves time

Open a project and start the chat panel. Ask for a function that matches an existing comment. Accept or edit the suggestion directly in the file.

Use inline edits for small fixes. Highlight a block and describe the change. The extension rewrites only that section.

Run the generated code immediately in the integrated terminal. Catch errors before they grow into larger problems.

Switch models mid session when one gives weaker suggestions on a particular language. The config supports multiple entries at once.

Keep sessions short. Long chats can eat memory on lower end machines common in many Indian setups.

Real limits and the catch you should know

Free API keys usually cap requests per day or month. Exceeding the limit returns errors until the next reset. Local models have no hard cap but depend on your hardware speed and available RAM.

Very large codebases can slow local inference noticeably. Expect better results on files under a few thousand lines.

Model quality varies by language. Python and JavaScript suggestions tend to be stronger than niche frameworks or less common languages.

Updates to the extension sometimes change config syntax. Check the GitHub releases before updating on a production machine.

ABikram Mondal builds web development for exactly this kind of problem at https://abikrammondal.com/services/web-development.

When to stick with it versus paid options

Choose Continue.dev when budget matters more than polished support. It works well for solo projects and small teams.

Move to paid tools only if you need guaranteed uptime or enterprise compliance features that free tiers skip. Most individual developers never hit that point.

Test for one week on a real task before deciding. The extension stays free to keep so there is no sunk cost if it does not fit.

Hardware upgrades improve local performance faster than any subscription fee in many cases.

The short version. Continue.dev gives free AI coding assistance inside VS Code with model choice and no forced subscription beyond usage limits.

Sources

Reported from the sources above on 2026-09-09. Figures are as published at the time of writing. If something here has moved on, the linked source is the one to trust.

From the desk of ABikram Mondal

If you got here because you are actually thinking about having it built properly once, instead of stitching six free tiers together and maintaining them forever, that is the work I do. I build for founders and small teams who want the thing to exist and work, not a deck about it.

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