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Run Local LLMs with n8n and Ollama (Private AI, No API Costs)

October 7, 2026 · By AI Compare

Private AI workflows with no per-token costs: connect n8n to local models with Ollama.

Install and setup

Why run local LLMs with n8n

Ollama runs open-weight models (Llama, Qwen, Mistral, Gemma and others) on your own machine or server. Connect it to n8n and you get AI workflows where:

  • No data leaves your infrastructure, useful for confidential documents and client data.
  • No per-token API costs; you pay only for hardware.
  • No rate limits from external providers.

The trade-off: local models are usually less capable than the best cloud models, and you need enough RAM (and ideally a GPU).

Hardware guide

Model sizeRAM needed (approx.)Good for
1–4B parameters4–8 GBClassification, extraction, short summaries
7–9B8–16 GBGeneral chat, drafting, simple agents
14B+16–32 GB+, GPU recommendedBetter reasoning, longer documents

A small VPS without a GPU will run small models slowly. For anything beyond light use, use a machine with a GPU or a Mac with Apple Silicon.

Step 1: Install Ollama and pull a model

Install Ollama from ollama.com, then:

ollama pull llama3.1:8b
ollama run llama3.1:8b "Hello"

Ollama serves an API on port 11434.

Step 2: Connect n8n to Ollama

In n8n, create an Ollama credential with the base URL:

SetupBase URL
n8n and Ollama installed directly on the same machinehttp://localhost:11434
n8n in Docker, Ollama on the hosthttp://host.docker.internal:11434 (on Linux add --add-host=host.docker.internal:host-gateway)
Both in the same Docker Compose projecthttp://ollama:11434 (the service name)

The most common error is using localhost from inside the n8n container, which points to the container itself, not your computer.

Step 3: Build the chat workflow

  1. Chat Trigger: gives you a chat window in n8n (and an optional public chat URL).
  2. AI Agent or Basic LLM Chain.
  3. Ollama Chat Model sub-node: choose the model you pulled.
  4. Optional Simple Memory for multi-turn chat.

Open the chat panel and send a message. The first response may take longer while the model loads into memory.

Use cases that work well locally

  • Summarising internal documents and meeting notes.
  • Classifying support tickets or emails.
  • Extracting fields from invoices or contracts into JSON.
  • Private RAG over company files using Embeddings Ollama and a local vector store (Qdrant or Postgres with pgvector).

Tips

  • Smaller models follow tool-calling instructions less reliably. Keep agents to one or two tools, or use a Basic LLM Chain with structured output.
  • Set temperature low (0–0.3) for extraction and classification.
  • n8n's "self-hosted AI starter kit" bundles n8n, Ollama, Qdrant and Postgres in Docker Compose, a fast way to get everything running together.

Related

  • RAG chatbot over Google Drive documents
  • Self-host n8n on a VPS

Related services and topics

AI & automation cost reductionInfrastructure auditn8nAutomation platformsAI AgentsAutomationIT & Dev

Tools in this article

n8n

Fair-code workflow automation platform with native AI capabilities. Combine visual building with custom code, self-host or cloud, 400+ integrations.

Ollama

Platform for running large language models locally on a computer

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