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Note: Hard loopback tests are intrusive and will impact service. In a hard loopback, a special loopback plug is used in order to loop the traffic from the T1 port back into the T1 port. This figure illustrates the setup for hard loopback.
Answer Wiki. A loopback is a virtual network interface that logically connects together the transmit and receive signal (forming a loop from the transmitter back to the receiver). It does this at the logical API level, so it is a great test of the logic of the network software which will rule out problems with the physical layer of the network.