Routers - what is a loopback interface

A loopback interface is a virtual interface that can be created on any Layer 3 device such as a router, L3 switch, or firewall. It can be assigned an IP address just like any physical interface, and can be configured with most features that physical interfaces can be configured with.

It is useful in multiple features and operations including:

  1. To define the router ID for multiple routing protocols such as OSPF and EIGRP
  2. The source and destination in the formation of BGP peers
  3. The Label Switch Router ID (LSR ID) when configuring LDP in MPLS
  4. An IP address that can be used for management of a network device.

It differs from other virtual interfaces such as an SVI on a L3 switch which corresponds to a VLAN, or a subinterface on a router, which corresponds to a physical interface. These virtual entities can be used as default gateways and can also be used to route traffic. Loopbacks cannot.