Loudon was educated at the Toronto Grammar School, Upper Canada College, and the University of Toronto, where he received a B.A. in 1862 and an M.A. in 1864. Initially a tutor in classics, he soon moved to mathematics, eventually becoming the professor of mathematics and physics at University College in 1875, succeeding his teacher John Bradford Cherriman. In 1887 he became professor of physics only, and became president of the University in 1892.