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Loop In explained.
Lightning Loop is a non custodial service offered by Lightning Labs to bridge on-chain and off-chain Bitcoin using Submarine swaps.
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Step 1: Deciding to Loop In
Your outgoing capacity is depleted and you want to regain it without opening new channels.
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Step 2: Send payment out
Your node sends funds on-chain to loop server to be swapped with off-chain liquidity.
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Step 3: Recieve Funds Off-chain
Loop server sends equivalent funds off-chain to your node by making a lightning payment to you.
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Done!
You send the payment on-chain from your wallet and also move remote balance to the local side of the node, gaining outgoing capacity.