I used query tool for this, but I think it handles only very small and well structured file. if file size is more than 50 kb, then there is long lag time. Do I need to use function tool to find endpoint of n8n RAG?

You can use n8n to find the details and just get vapi to receive the data from n8n result

Use a Function node is recommended to efficiently preprocess, split, and enrich data for better performance..