Loopback interface are always will be in up state as long as router is up.

For example , OSPF

running routers use somthing called Router ID (which is just a router phyical interface ip address or
loopback address or it can b manually set)as its hostname in ospf neighbour relation process.so lets
if it chooses the Physical interface address as its router id and if that interface goes down then all the
neighour router in ospf domain see that entire router is down.thats why its best to make Loopback
address as router ID bcs it will be always in UP State.I hope this help.Happy cisco learning

Hi.

Loopback interfaces can be used for following purposes:

1. Create an attached network without attaching additional interfaces & devices.

Example - if you want to have an additional network 10.1.1.1 attached to a router, you will need to
have a normal port in an active state with the above address.
Create a loopback interface and assign it the ip for the same effect.

2. Some protocols require identifying numbers which can be derived from loopback interfaces ip
address for consistency.

3. Some routing protocols require ip address of adjacent routers to be able to exchange information.
If the interface having that ip is down, they will fail to do so.
With loopback, as long as a path is available to loopback interface, they will be able to connect to the
said router.

4. At times we can direct network traffic to search for loopbak interfaces network, so that it can be
routed to Internet - (for example).
As long as the loopback network can be reached, through path A, if that fails, through path B, if that
fails, through path C, and so on - Internet is accessible.

Take care,
Navneet.

Dear Mohammed..

Basicaly loopback is used for DR(Designated Routrer)/BDR(Back up Designated Router)selection in

ospf protocol.

Selection of DR/BDR is done on the basis of priority of that router.By default priority is set to 1 for all
the router.If priority is set to higher number like 2,3,4 etc upto 255 than that particular router will be
selected as DR.
But if we have not set any priority of the router than all the router will have priority as 1 as i said.,
then router will look ip address of the interface.The router with higher ip add will be automaticaly
selected as DR.
But if we want a particular router to be DR and other particular router to be BDR then we use
loopback interface which is virtual interface just use to fix the selction of DR and BDR.So in loopback
interface we assign highest ip add to that router so automaticaly that router with highest ip
add(Loopback interface) will be selected as DR.

So this way we can make DR/BDR router of our choice.Hope this answer helps you.Please reply me
if u dnt get it.

Regards