Telephone line coupling transformers are specifically designed to terminate the loop current of a telephone line!! I have done it many times.

What you are talking about is a wet type transformer. And what I am talking about is a dry type transformer.Typical modern transformers are "dry" type, because they perform well and ane small, but can't withstand the line DC current going though them without saturation.

"Wet" transformers are are designed so that they can withstand the DC current present on the telephone line flowing though their primary without transformer saturation. Ther drawback of "wet" transformers are that they are typically bigger and have worse performance figures than "dry" transformers. "Wet" transformers are traditionally used in telephoine circuit, but nowadays they are more and more often relaced with "dry" transformers for economical and technical reasons (a high speed modem would not work well if it would use typical "wet" telephone transformer). The "wet" transformers have typically the maximum allowed direct current listed on their datasheet (more current than that will saturate the transformer core).


For more information, please have a look at

Telephone Line interface