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enter image description here http://www.firewall.cx/cisco-technical-knowledgebase/cisco-routers/868-cisco-router-gre-ipsec.html

Let me use the same example as in my previous question.

R1(config)# interface Tunnel0
R1(config-if)# ip address 172.16.0.1 255.255.255.0
R1(config-if)# tunnel source 1.1.1.10
R1(config-if)# tunnel destination 2.2.2.10

Why is it necessary to configure tunnel source IP? Isn't it something R1 can figure out on its own? When pinging 172.16.0.2, it adds IP and GRE headers, and sets dst IP to 2.2.2.10 - it knows it based based on the configuration above.

Can't R1 simply figure the source IP on its own? R1 just checks its routing table to find out the next hop for 2.2.2.10 and chooses the interface with the longest prefix match. There's no ambiguity regarding which interface it should send that packet from.

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Often, you may want to use a loopback, since it will never go down, as the source because you may have a backup path to the other end. It is not always the right thing to do to use the exit interface since it could go down, but there is another interface which could also get you to the other router. Putting it on a loopback will allow the tunnel to continue to function, no matter if the best interface to the other end is up or not.

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