Disclaimer: This was an interview question.
What is the benefit of loopback address? All I knew is loopback means localhost. And probably helps interprocess communication. Is there more to it?
Yes.
You can define a VIP on loopback from same subnet free IP for load balancing purposes.
With some extra kernel settings on clients (arp announce/arp ignore), you define a load balancer infront which listens on VIP (and desired ports) above in DSR mode (direct server return) with clients configured with same VIP on loopback interface.
This is one of the most efficient way to balance traffic, as return traffic (from client to your backend servers) goes directly bypassing the load balancer, saving bandwidth and spreading the network load.
Limitation is that clients and LB must be in same network segment (vlan/subnet).
Often used in real world to balance the balancers.
client → L2/L3 balancers (VRRP+VIP) → L7 balancers e.g nginx, haproxy or likes → other backends with your services in any subnet L7 balancer can reach.
Does not work in cloud environments or works partially due to multicast limitations.
Regards.
Did not quite get it.
Was an interesting specific answer.
I think the question was targeting a more general answer.
Let me try.
The benefit of loopback interface is that you can use "localhost" just like any other host on the network.
You can observe localhost connections just like remote connections, on Linux with the netstat or ss command e.g. ss -pant
Packets sent to a loopback address never leave the host — they are processed entirely within the network stack.
You can, for example, ping 127.0.0.1 and this will work without any network cards installed.
When an application binds to 127.0.0.1 (or ::1 in IPv6), the OS’s network stack will only accept connections originating from the same host. Any packet arriving on an external network interface — even one targeting the same port — will be rejected. This is good for binding applications to databases on the same host and is considered more secure.
In other words, ff a service doesn’t need remote access — databases, cache daemons (Redis, Memcached), or local-only APIs — it should always be bound to loopback.
Finally, binding a service to localhost (127.0.0.1) ensures it’s only reachable locally — a simple, robust security measure at the IP layer.