BAKER & DANIELS
                     300 NORTH MERIDIAN STREET
                            SUITE 2700
                    INDIANAPOLIS, INDIANA 46204
                          (317) 237-0300






November 16, 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 $800,000,000 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