What is loopback IP address?

The loopback IP address is the address used to access itself. The IPv4 designated 127.0.0.1 as the loopback address with the 255.0.0.0 subnet mask. A loopback interface is also known as a virtual IP, which does not associate with hardware interface. On Linux systems, the loopback interface is commonly called lo or lo0. The corresponding hostname for this interface is called localhost.
 
The loopback address is used to test network software without physically installing a Network Interface Card (NIC), and without having to physically connect the machine to a TCP/IP network. A good example of this is to access the web server running on itself by using http://127.0.0.1 or http://localhost.