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


February 13, 1995


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

          Re:  Medium-Term Notes, Series D, 
               Due Nine Months or More from Date of Issue         
              

Ladies and Gentlemen:

          We have acted as counsel for American General Finance
Corporation, an Indiana corporation (the "Company"), in
connection with the issuance and sale by the Company of up to
$500,000,000 aggregate principal amount of the Company's Medium-
Term Notes, Series D, due nine months or more from date of issue
(the "Notes"), including the preparation of:

          (a)  The Company's Registration Statement on Form S-3,
     Registration No. 33-55803 (the "Registration Statement"),
     and the Prospectus constituting a part thereof, dated
     December 14, 1994, relating to the issuance from time to
     time of up to $2,000,000,000 aggregate principal amount of
     debt securities of the Company and warrants to purchase such
     debt securities pursuant to Rule 415 promulgated under the
     Securities Act of 1933, as amended (the "1933 Act");

          (b)  The Prospectus Supplement, dated February 13, 1995
     to the above-mentioned Prospectus relating to the Notes and
     filed with the Securities and Exchange Commission (the
     "Commission") pursuant to Rule 424 promulgated under the
     1933 Act (the Prospectus dated December 14, 1994 and the
     Prospectus Supplement dated February 13, 1995, including the
     documents incorporated by reference therein pursuant to
     Item 12 of Form S-3 under the 1933 Act, being hereinafter
     collectively referred to as the "Prospectus"); and  

          (c)  The Indenture, dated as of October 1, 1994,
     between the Company and The Chase Manhattan Bank (National
     Association), 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 deemed advisable, and 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 Notes have been duly authorized by all
necessary action by the Board of Directors, and by the Terms and
Pricing Committee of the Board of Directors, of the Company and,
when the variable terms of the Notes have been established by any
two of the authorized officers to whom such authority has been
delegated and the Notes have been executed and authenticated as
specified in the Indenture and delivered against payment of the
consideration therefor, 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 1933 Act
or the rules or regulations of the Commission thereunder.

                              Yours very truly,

                              /s/ BAKER & DANIELS