A loopback test is a test in which a signal in sent from a communications device and returned (looped back) to it as a way to determine whether the device is working right or as a way to pin down a failing node in a network. One type of loopback test is performed using a special plug, called a wrap plug, that is inserted in a port on a communications device. The effect of a wrap plug is to cause transmitted (output) data to be returned as received (input) data, simulating a complete communications circuit using a single computer.
This is primarily intended as a means of testing the transmission or transportation infrastructure.Most TCP/IP implementations support a loopback interface, which is a virtual software interface, i.e., not connected to any hardware, but fully integrated into the computer system's internal network infrastructure IPv4 address used is : 127.x.x.x