In the Bible, there are some allegories. This, however, does not mean that the Bible is an allegory. Usually, in the biblical context, it is clear that this is an allegory.
The following material is based on the books:
1. Carl B. Gibbs Principles of Biblical Interpretation
2. Henry A. Virkler Hermeneutics: Principles and Process of Biblical Interpretation
3. Vitaly Tkachuk Methods and Principles of Interpretation of the Holy Scriptures (in Russian)
The differences between parables and allegories:
1. Parables are enlarged comparisons. Allegories are enlarged metaphors.
2. In parables, the narrative and the interpretation are separated. In allegories, they are mixed.
3. Parables have one main thought, the details are valuable only if they are related to the main thought. Allegories have many comparisons and they are not always related to the main idea. So, all the details in allegories are important.
4. Characters of parables are real. Characters of allegories may be somewhat fantastic.
If the Bible contains an allegory, its interpretation is usually given in the text, for example, Proverbs 5:15-19; John 15:1-10; 1 Corinthian 3:1-5; Ephesians 6:10-17). So, the main principle of interpretation of allegories is to read them carefully to find out explanation of each detail. It is also important to notice the context of the allegory: when, who, and why said this allegory.