BAKER & DANIELS
     300 North Meridian Street, Suite 2700
       Indianapolis, Indiana  46204-1782
                 (317) 237-0300
               FAX (317) 237-1000
              www.bakerdaniels.com




                                       EXHIBIT 5

March 11, 1999


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

      Re:  5.80% Senior Notes due March 15, 2002

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
5.80% Senior Notes due March 15, 2002 (the "Notes"),
including the preparation of:

 (a)  The Company's Registration Statement on Form S-3
(Registration No. 333-28925), as amended by Amendment No.
1 on July 1, 1997 (the "Registration Statement"), including
the Prospectus, dated July 2, 1997, constituting a part
thereof (the "Prospectus").

 (b)  The Pricing Agreement, dated March 9, 1999,
including the Underwriting Agreement incorporated therein,
between the Company and the Underwriter of the Notes
(together, the "Pricing Agreement").

 (c)  The Indenture, dated as of May 1, 1997, between
the Company and The First National Bank of Chicago, 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