When you ping the loopback address, a packet is sent where?

Down through the layers of the IP architecture and then up the layers again

Ping is tool which is inbuilt application of OS and then follow ICMP protocol which has basic purpose to calculate packet propagation time. ICMP protocol start at network layer protocol no 1

to know NIC card working status we can ping 127.0.0.X from command prompt

Your send packets on your own machine

Ping follow ICMP protocol which has basic purpose to calculate packet propogation time. ICMP protocol start at network layer then data layer and physical layer. In your case, it goes from data layer to physical layers means your NIC card. If you want check, just disable all ethernet and wireless nic and try ping 127.0.0.1.

127.0.0.1, your own device 

to the TCP/IP stack in your computer

Local TCP/IP protocol stack