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

January 9, 1995 


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

     Re:  8-1/4% Senior Notes due January 15, 1998

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
$200,000,000 aggregate principal amount  of the Company's  8-1/4%
Senior  Notes due January 15, 1998  (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 January 6, 1995, including
the  Underwriting  Agreement  incorporated  therein,   among  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