Expected loss
Expected loss is the value of a possible loss times the probability of that loss occurring. (see: Loss function#Expected loss)
In banking lending (homes, autos, credit cards, commercial lending, etc.) a third concept is introduced to emphasize that most loans are repaid over time and therefore have a declining outstanding amount to be repaid. Additionally, loans are typically backed up by pledged collateral whose value changes differently over time vs. the outstanding loan value. In banking the three factors are: