BAKER & DANIELS
                 300 North Meridian St., Ste. 2700
                   Indianapolis, Indiana  46204
                          (317) 237-0300



  September 26, 1994 



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

     Re:  7% Senior Notes due October 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 7%
  Senior Notes  due October 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   September 26, 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.

     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