Loopback The Loopback interface is a virtual Layer 2 interface over which loopback IP addresses are configured. The Loopback interface represents the router by an IP address that is always available, a feature necessary mainly for network troubleshooting.

Since the Loopback interface is not connected to any physical interface, an entry in the routing table can not have the Loopback interface’s subnet as its next hop.

GRE tunnel A GRE tunnel is a virtual point-to-point link using two routers at two ends of an Internet cloud as its endpoints. GRE tunneling encapsulates packets and sends them over a GRE tunnel. At the end of the GRE tunnel, the encapsulation is removed and the packet is sent to its destination in the network at the far end of the GRE tunnel. For more information, see GRE tunneling.