BAKER & DANIELS
               300 North Meridian Street, Suite 2700
                 Indianapolis, Indiana  46204-1782
                          (317) 237-0300
                       FAX:  (317) 237-1000

  March 25, 1994 




  American General Finance Corporation
  601 N.W. Second Street
  Evansville, Indiana  47708

     Re:  5.80% Senior Notes due April 1, 1997

  Ladies and Gentlemen:

     We  have  acted  as  counsel  to  American  General  Finance
  Corporation,   an  Indiana  corporation   (the  "Company"),  in
  connection  with  the  issuance  and  sale by  the  Company  of
  $150,000,000 aggregate principal amount of the Company's  5.80%
  Senior  Notes due  April 1, 1997  (the "Notes"),  including the
  preparation of:

     (a)  The  Company's  Registration   Statement  on   Form S-3
  (Registration  No. 33-57910)  (the  "Registration  Statement"),
  including the  Prospectus, dated March 1, 1993,  constituting a
  part thereof (the "Prospectus").

     (b)  The Pricing Agreement,  dated March 22, 1994, including
  the  Underwriting Agreement  incorporated therein,  between the
  Company  and  the  underwriters  of the  Notes  (together,  the
  "Pricing Agreement").

     (c)  The  Senior Indenture,  dated  as of  February 1, 1993,
  between the Company and Citibank, N.A., as Trustee, pursuant to
  which the Notes are to be issued (the "Indenture").

     For purposes of this opinion, we have examined  originals or
  copies, identified  to  our satisfaction,  of  such  documents,
  corporate records, instruments and  other relevant materials as
  we  have deemed advisable; and we have made such examination of
  statutes and decisions and reviewed such questions of law as we
  have considered necessary  or appropriate. In  our examination,
  we have  assumed the genuineness  of all signatures,  the legal
  capacity  of  all  natural  persons, the  authenticity  of  all
  documents  submitted  to us  as  originals,  the conformity  to
  original documents of all documents submitted to us  as copies,
  and the authenticity  of the  originals of such  copies. As  to
  facts   material  to   this  opinion,   we  have   relied  upon
  certificates,   statements   or   representations   of   public







  officials, of  officers and representatives of  the Company and
  of others, without any independent verification thereof. 

     The  laws  covered  by  the opinions  expressed  herein  are
  limited  to the laws  of the State  of Indiana  and the federal
  laws of the United States.

     On the basis of and subject  to the foregoing, we are of the
  opinion that:

     1.   The Company is existing as a corporation under the laws
  of the State of Indiana.

     2.   The  issuance of the Notes has  been duly authorized by
  all necessary  corporate action  of the Company  and, when  the
  Notes  have   been  duly  executed,   authenticated,  sold  and
  delivered  in accordance with the terms of the Indenture and as
  described  in the  Registration  Statement and  in the  Pricing
  Agreement, the  Notes will be valid and  binding obligations of
  the Company, enforceable against the Company in accordance with
  their terms,  except as enforcement  thereof may be  limited by
  bankruptcy, insolvency,  fraudulent conveyance, reorganization,
  moratorium or  other laws of general  applicability relating to
  or  affecting enforcement  of creditors'  rights or  by general
  equity principles.

     We  consent to the  filing of this opinion  as an exhibit to
  the Registration Statement and to the reference to us under the
  heading  "Legal Opinions"  in the  Prospectus.  In  giving such
  consent, we do  not admit that we  come within the  category of
  persons  whose  consent  is  required under  Section 7  of  the
  Securities Act of 1933, as amended, or the rules or regulations
  of the Securities and Exchange Commission thereunder.

                              Yours very truly,


                              /s/  BAKER & DANIELS