You should not normally have to manually create a loopback interface as Ubuntu creates one automatically for you during installation. To check that one is set up, you can use the ifconfig command while working as root to show something similar to this:
$ ifconfig lo Link encap:Local Loopback inet addr:127.0.0.1 Mask:255.0.0.0
inet6 addr: ::1/128 Scope:Host
UP LOOPBACK RUNNING MTU:16436 Metric:1
RX packets:13 errors:0 dropped:0 overruns:0 frame:0
TX packets:13 errors:0 dropped:0 overruns:0 carrier:0
What you see in this example is evidence that the loopback interface is present and active. The inet addr is the IP number assigned to the localhost, typically 127.0.0.1 along with the broadcast mask of 255.255.255.0 and that there has been little activity on this interface (rx = receive and tx = transmit). If your output does not look like the one above, you must hand-configure the localhost interface after you finish the rest of this section.
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