Why use loopback

The Loopback interface can be used when you need an "always up" interface as the end-point for a tunnel or IBGP session. When a physical interface goes down, it causes the tunnel or BGP session to terminate. Using a Loopback interface moves the connection to an interface which never stops working. Another benefit is that any alternate routes to the Loopback interface will allow the tunnel or BGP session to continue to operate even when an interface dies.

The Loopback interface can also be used with OSPF to select a router ID that is not tied to a physical interface or to force a different router ID. The Loopback interface address is always selected as the router ID for OSPF, even if other interfaces have a higher IP address. If multiple Loopback interfaces exist, the first Loopback interface is used.

To configure a Loopback interface, use the following configuration:

interface loopback 0
ip address 1.2.3.4 255.0.0.0

Search for "loopback interface" in UniverCD for details and other configuration options.