If you’ve been exploring AI-powered code editors, you’ve likely come across Cursor—a popular tool that leverages AI to generate, refactor, and debug code. But its free tier often feels restrictive, and the pro version comes with a $20/month price tag that might not fit every developer’s budget. What if there was a free cursor alternative that is open source, local, and put you in full control of your data?
Welcome to a simple, powerful setup using Visual Studio Code (VS Code), combined with the Cline and Continue.dev extensions, powered by local AI models via Ollama or free API models through OpenRouter. This tutorial walks you through transforming VS Code into a robust AI coding assistant that rivals Cursor—without any subscription fees.
Step 1: Install Visual Studio Code (VS Code)
First things first—if you don’t already have VS Code installed, head over to the VS Code homepage. It’s a lightweight, open-source code editor developed by Microsoft and widely loved for its speed, simplicity, and extensibility.
Download the version that matches your operating system, whether it’s macOS, Windows, or Linux. The installation is straightforward, and once complete, you’ll have a solid foundation ready for AI-powered coding enhancements.
Step 2: Install Ollama for Local AI Models
To truly unlock a cursor alternative free experience that respects your privacy, we need to run AI models locally. That’s where Ollama comes in—it lets you download and run powerful open-source models straight on your machine.
Once installed, you can download advanced AI models like DeepSeek R1 (great for chat and coding questions) and QWEN 2.5 Coder (optimized for code completion). Running these models locally means you don’t need an internet connection every time you want AI assistance, and your code and data stay private.
Note: Local models require sufficient storage space. If your device has limited memory or you prefer a cloud-based approach, we’ll cover how to use OpenRouter’s free API models later in this guide.
Step 3: Install VS Code Extensions—Continue.dev & Cline
Next, open VS Code and navigate to the Extensions tab on the sidebar. Search for and install two key extensions:
- Continue.dev: Provides AI chat, inline code completion, and editing capabilities within VS Code.
- Cline: Adds advanced agent-like features, enabling AI to plan and execute complex, multi-file coding tasks and run terminal commands.
These two extensions, when combined, replicate and even surpass many of Cursor’s features—and best of all, they’re free and open source.
Step 4: Configure Continue.dev with Ollama Models
With the extensions installed, it’s time to configure Continue.dev to use the local AI models you downloaded via Ollama.
- Open the Continue extension panel in VS Code.
- Close the “create assistant” model option—you won’t need it.
- Click the cube icon to open the model configuration settings.
- Set the chat model to DeepSeek R1, which has 7 billion parameters and handles coding questions well.
- Set the autocomplete model to QWEN 2.5 Coder, a smaller 2.5 billion parameter model optimized for code completion—bigger models don’t necessarily improve autocomplete performance.
To download these models locally, open your terminal or command prompt and run:
ollama pull DeepSeek-R1
ollama pull qwen2.5-Coder-7b
Once downloaded, enter the exact model names and provider info into Continue.dev’s config and save your changes.
Step 5: Set Up Cline and Register for Free Trial Credits
Cline extends your AI capabilities by allowing multi-file editing, dependency installation, and running commands—features that are essential for a seamless coding experience like Cursor’s.
Click the Cline icon in VS Code and sign up for a free account using Google or GitHub. This grants you trial credits to access powerful AI models hosted by Cline.
Once signed in, you can start using Cline to create projects, write code across multiple files, and automate coding workflows with a single prompt.
Step 6: Testing Your AI-Powered Coding Setup
Let’s see it in action. Create a simple Python file and try writing a function. As you type, Continue.dev’s autocomplete will suggest code completions. Press Tab to accept suggestions seamlessly.
Now, try using the chat feature by instructing Continue.dev to create a Flappy Bird game. While Continue responds like a chatbot (without directly editing files), Cline can take your prompt and generate all necessary files, run commands, and even test the output automatically.
Enable the “auto approve” checkbox in Cline to let it handle file creation and safe command execution without prompts, streamlining your workflow.
Step 7: Using OpenRouter API as a Free Alternative After Trial Credits
Once your free credits with Cline are used up, you can switch to free AI models provided by OpenRouter, a unified platform offering access to many AI models through a single API key.
To set this up:
- Sign up for a free OpenRouter account and create an API key.
- Copy the API key and go back to Cline’s settings in VS Code.
- Change the provider to OpenRouter and paste your API key.
- Select a large free model like DeepSeek R1 (with 671 billion parameters) or DeepSeek v3.0324 (even larger and highly capable).
These models are powerful and comparable to GPT-4 Omni for code tasks, though free usage might be slower or occasionally time out due to demand.
Why This Setup Beats Cursor’s Free Version
This VS Code + Cline + Continue.dev combo stands out because it:
- Is completely free and open source—no monthly fees required.
- Runs AI models locally (via Ollama) or uses free API models (OpenRouter), ensuring your data never leaves your control.
- Supports multi-file editing, dependency installation, and terminal commands, enabling end-to-end project creation with AI.
- Offers flexible keyboard shortcuts to speed up coding, debugging, and inline code editing.
- Provides better privacy and data security without needing privacy modes or worrying about third-party data usage.
FAQ: Your Questions Answered
Q: Do I require a powerful computer to run local AI models with Ollama?
A: While Ollama models do require some disk space and decent RAM, many models like QWEN 2.5 Coder are optimized to be lightweight. If your device struggles, you can always switch to OpenRouter’s free API models.
Q: How does this compare to Cursor’s paid Pro plan?
A: This setup replicates many Pro features—multi-file editing, code completion, debugging, and project creation—without subscription costs. However, Cursor’s interface might feel more polished, and its cloud models can be faster in some cases.
Q: Can I customize which AI models I use?
A: Absolutely. You can swap models in Continue.dev and Cline configurations to experiment with different AI engines, whether local or cloud-based.
Q: Is my code safe when using this setup?
A: Yes. Running models locally with Ollama means your code never leaves your machine. When using OpenRouter’s free APIs, data is sent over the network, so review their privacy policies accordingly.
Q: Are there other alternatives to Cursor?
A: Yes, but this VS Code + Cline + Continue.dev combo offers a unique balance of cost (free), privacy, and powerful AI features.
Conclusion
If you’re looking for a free cursor alternative that doesn’t compromise on features or privacy, this VS Code setup with Cline and Continue.dev is a game changer. It empowers you to harness AI’s full potential locally or via free APIs, all while keeping your data under your control.
Whether you’re a hobbyist avoiding subscription fees or a professional developer seeking privacy and flexibility, this tutorial equips you with everything needed to get started. Give it a try, and watch your coding workflow transform.
What’s your take on this setup? Would you switch from Cursor to VS Code with Cline and Continue? Share your thoughts and questions below—let’s get the conversation going.
