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"); and

          (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").  

          You have requested our opinion regarding certain
federal income tax matters in connection with the offering of the
Notes.  The terms of the Notes are described in the Prospectus.







          We are of the opinion that the information set forth in
the Prospectus under the caption "UNITED STATES TAX
CONSIDERATIONS" is an accurate summary of the United States
federal income tax consequences purported to be described
therein, all based on laws, regulations, rulings and decisions in
effect on the date hereof.

          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