How To: Add a Loopback Adapter in Windows 7 onward

A Loopback Adapter can be used to do the following:

Use Internet Connection Firewall (ICF) to protect virtual networks. ICF checks all communications that cross the connection between your virtual network and the Internet and is selective about which responses from the Internet it allows.
Provide host-to-guest networking and file sharing without having to use an external network.
Use Internet Connection Sharing to provide Network Address Translation (NAT) and share a single connection to the Internet between the host operating system and one or more virtual machines.

Step-by-step guide

Follow the given steps to add a Loopback Adapter in Windows 7 onwards:

STEPS	FIGURE
Go to the Start button, in the search box type hdwwiz.exe Double click the hdwwiz.exe program.
Once the Add Hardware Wizard opens. In the Add Hardware dialog box, click Next.
Select "Install the hardware that I manually select from a list" radio button and click Next.
In the Common hardware types list, click Network adapters, and then click Next.
On the left hand side Manufacturer list, click Microsoft. On the right hand side Network Adapter list, click Microsoft Loopback Adapter (only Windows 7) or Microsoft KM-TEST Loopback Adapter(Windows 8 onwards), and then click Next twice. If a message about driver signing appears, click Continue Anyway.
In the "Wizard is ready to install your hardware" dialog box, click Next. When the installation is completed, click OK to close the wizard.