<PAGE>
                     SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C.  20549

                                 FORM 10-Q


(Mark One)

[X]       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
                        SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended            September 30, 1996              

                                     OR

[ ]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _____________                   


                       Commission file number 1-6155


                   AMERICAN GENERAL FINANCE CORPORATION                  
           (Exact name of registrant as specified in its charter)



                Indiana                               35-0416090         
       (State of Incorporation)                   (I.R.S. Employer
                                                 Identification No.)


 601 N.W. Second Street, Evansville, IN                 47708            
(Address of principal executive offices)             (Zip Code)


                               (812) 424-8031                              
            (Registrant's telephone number, including area code)


Indicate  by check  mark whether the  registrant (1) has  filed all reports
required to be filed by  Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was  required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.  Yes  X   No    

The  registrant  meets the  conditions  set  forth  in General  Instruction
H(1)(a) and (b) of Form  10-Q and is therefore  filing this Form 10-Q  with
the reduced disclosure format.

At  November 13,  1996, there  were 10,160,012  shares of  the registrant's
common stock, $.50 par value, outstanding.
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                      PART I - FINANCIAL INFORMATION


Item 1.  Financial Statements.



           AMERICAN GENERAL FINANCE CORPORATION AND SUBSIDIARIES
                Condensed Consolidated Statements of Income
                                (Unaudited)


                             Three Months Ended      Nine Months Ended
                                September 30,           September 30,    
                               1996       1995        1996        1995   
                                       (dollars in thousands)

Revenues
  Finance charges            $350,484   $383,483   $1,065,721  $1,110,636
  Insurance                    51,677     55,232      154,950     165,842
  Other                        20,594     19,891       64,980      61,207

Total revenues                422,755    458,606    1,285,651   1,337,685

Expenses
  Interest expense            116,034    128,566      360,852     378,004
  Operating expenses          119,357    121,796      373,711     345,145
  Provision for finance 
    receivable losses          88,940    113,583      295,683     260,263
  Insurance losses and loss
    adjustment expenses        25,787     32,041       80,841      91,842

Total expenses                350,118    395,986    1,111,087   1,075,254

Income before provision for
  income taxes                 72,637     62,620      174,564     262,431

Provision for Income Taxes     26,068      6,229       63,755      80,428


Net Income                   $ 46,569   $ 56,391   $  110,809  $  182,003




See Notes to Condensed Consolidated Financial Statements.
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           AMERICAN GENERAL FINANCE CORPORATION AND SUBSIDIARIES
                   Condensed Consolidated Balance Sheets
                                (Unaudited)


                                             September 30, December 31,
                                                1996            1995   
Assets                                         (dollars in thousands) 
 
Finance receivables, net of unearned
  finance charges:
    Real estate loans                        $3,337,840      $2,817,258
    Non-real estate loans                     2,411,484       2,694,369
    Retail sales contracts                      973,119       1,189,272
    Private label                               784,074         942,706
    Credit cards                                514,938         557,603

Net finance receivables                       8,021,455       8,201,208
Allowance for finance receivable
  losses                                       (455,273)       (482,243)
Net finance receivables, less allowance
  for finance receivable losses               7,566,182       7,718,965

Investment securities                           856,764         883,895
Cash and cash equivalents                       101,564          88,297
Notes receivable from parent                    175,318         187,038
Goodwill                                        265,360         279,532
Other assets                                    310,136         327,750

Total assets                                 $9,275,324      $9,485,477


Liabilities and Shareholder's Equity

Long-term debt                               $4,546,718      $4,935,894
Short-term notes payable:
  Commercial paper                            2,551,784       2,194,771
  Banks and other                                   -           135,700
Insurance claims and policyholder
  liabilities                                   463,386         483,971
Other liabilities                               271,934         275,683
Accrued taxes                                    21,668          10,962

Total liabilities                             7,855,490       8,036,981

Shareholder's equity:
  Common stock                                    5,080           5,080
  Additional paid-in capital                    691,914         691,914
  Net unrealized gains on investment 
    securities                                   13,496          38,412 
  Retained earnings                             709,344         713,090

Total shareholder's equity                    1,419,834       1,448,496

Total liabilities and shareholder's equity   $9,275,324      $9,485,477

See Notes to Condensed Consolidated Financial Statements.
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           AMERICAN GENERAL FINANCE CORPORATION AND SUBSIDIARIES
              Condensed Consolidated Statements of Cash Flows
                                (Unaudited)


                                                       Nine Months Ended
                                                         September 30,    
                                                      1996          1995  
                                                    (dollars in thousands)
Cash Flows from Operating Activities
Net income                                          $110,809      $182,003
Reconciling adjustments to net cash
  provided by operating activities:
    Provision for finance receivable losses          295,683       260,263
    Depreciation and amortization                     64,836        81,343
    Deferral of finance receivable  
      origination costs                              (37,319)      (57,700)
    Deferred federal income tax charge (benefit)       8,504       (26,980)
    Change in other assets and other liabilities         579        84,245
    Change in insurance claims and
      policyholder liabilities                       (20,585)       21,616
    Gain on finance receivables sold through
      securitization                                     -          (4,552)
    Other, net                                        58,362        (9,928)
Net cash provided by operating activities            480,869       530,310

Cash Flows from Investing Activities
  Finance receivables originated or purchased     (3,791,596)   (4,474,101)
  Principal collections on finance receivables     3,645,271     3,673,610
  Securitized finance receivables sold                   -         100,000
  Investment securities purchased                   (149,221)     (145,094)
  Investment securities called, matured and sold     138,914        70,817
  Change in notes receivable from parent              11,720           -   
  Other, net                                         (37,839)      (36,151)
Net cash used for investing activities              (182,751)     (810,919)

Cash Flows from Financing Activities
  Proceeds from issuance of long-term debt            27,950     1,496,087
  Repayment of long-term debt                       (419,560)     (830,760)
  Change in short-term notes payable                 221,313      (197,331)
  Dividends paid                                    (114,554)     (108,509)
Net cash (used for) provided by financing 
  activities                                        (284,851)      359,487

Increase in cash and cash equivalents                 13,267        78,878 
Cash and cash equivalents at beginning of period      88,297        38,543

Cash and cash equivalents at end of period          $101,564      $117,421


Supplemental Disclosure of Cash Flow Information
  Income taxes paid                                 $ 19,155      $118,874
  Interest paid                                     $359,873      $355,582


See Notes to Condensed Consolidated Financial Statements.
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           AMERICAN GENERAL FINANCE CORPORATION AND SUBSIDIARIES
            Notes to Condensed Consolidated Financial Statements
                             September 30, 1996



Note 1.  Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have
been prepared  in accordance with generally  accepted accounting principles
for  interim periods and include  the accounts of  American General Finance
Corporation and its subsidiaries.  American General  Finance Corporation is
hereinafter  referenced as  "AGFC" or  collectively with  its subsidiaries,
whether directly or indirectly  owned, as the "Company".   The subsidiaries
are wholly-owned, and  all intercompany  items have been  eliminated.   Per
share information is not included because AGFC is a wholly-owned subsidiary
of  American  General  Finance,  Inc.  (AGFI).    AGFI  is  a  wholly-owned
subsidiary of American General Corporation (American General).


Note 2.  Adjustments and Reclassifications

These condensed consolidated financial statements  include all adjustments,
consisting only of  normal recurring adjustments,  considered necessary  by
management for a fair presentation of  the Company's consolidated financial
position  at September  30, 1996  and December  31, 1995,  its consolidated
results of operations for  the three months and nine months ended September
30,  1996 and  1995, and its  consolidated cash  flows for  the nine months
ended  September 30, 1996 and 1995.  These condensed consolidated financial
statements  should be read  in conjunction with  the consolidated financial
statements and related  notes included  in the Company's  Annual Report  on
Form 10-K for the year ended December 31, 1995.  

To conform with  the 1996 presentation, certain  items in the prior  period
have been reclassified.


Note 3.  Derivative Financial Instruments

AGFC  makes limited use of  derivative financial instruments  to manage the
cost of its  debt.  AGFC has used interest  conversion agreements to reduce
its  exposure  to   future  fluctuations  in  interest   expense  rates  by
effectively converting  short-term and medium-term floating-rate  debt to a
fixed-rate  basis.  At September 30,  1996, outstanding interest conversion
agreements in which  AGFC contracted  to pay  interest at  fixed rates  and
receive floating rates  totaled $540  million of notional  amount, with  an
average fixed  pay rate of  8.05% and an  average floating receive  rate of
5.94%.  AGFC's use of such agreements did not have a material effect on the
Company's weighted-average interest  rate or reported  interest expense  in
the first nine months of 1996 or 1995.
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Note 4.  Accounting Changes
 
In  June  1996, the  Financial  Accounting  Standards Board  (FASB)  issued
Statement of Financial Accounting Standards 125, "Accounting for  Transfers
and Servicing  of Financial  Assets  and Extinguishments  of  Liabilities."
This  statement  provides  accounting  standards  for  determining  whether
transfers  of financial assets are  sales or secured  borrowings and when a
liability should be considered extinguished.  The statement must be applied
prospectively to  all applicable transactions occurring  after December 31,
1996; however, application  of certain  provisions may be  delayed for  one
year pending approval by  the FASB.  Earlier or  retroactive application is
not permitted.   The impact of this statement on the Company's consolidated
results  of operations  and  financial  position  is  not  expected  to  be
material.
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<PAGE> 7

Item 2.  Management's Discussion and  Analysis of  Financial Condition  and
         Results of Operations.


                      LIQUIDITY AND CAPITAL RESOURCES


Overview

The Company's sources of funds include  operations, issuances of fixed-rate
and floating-rate debt, borrowings under credit facilities, and the sale of
finance receivables  through securitization.  Management  believes that the
overall sources  of liquidity available to the  Company will continue to be
sufficient to satisfy its foreseeable financial obligations and operational
requirements.  


Liquidity

Operating cash  flow,  which  includes  net income  adjusted  for  non-cash
revenues and expenses,  totaled $480.9  million for the  nine months  ended
September 30, 1996 compared to $530.3 million for the same  period in 1995.
This cash flow was used principally  to fund the net repayments of  debt of
$170.3  million, to finance the  net originations and  purchases of finance
receivables  of $146.3 million, and  to pay dividends  of $114.6 million to
AGFI for  the nine months  ended September 30,  1996.  Operating  cash flow
combined  with the  net  proceeds of  increased debt  and  the proceeds  of
securitized finance receivables  sold generated cash  flow of $1.1  billion
for the same period  in 1995.  This cash flow was  used principally to fund
the net originations and purchases of finance receivables of $800.5 million
and  to pay dividends of $108.5  million to AGFI for  the nine months ended
September 30, 1995.

Dividends  paid are  typically managed to  maintain the  Company's targeted
leverage  of 6.5 to 1 of debt  to tangible equity (equity less goodwill and
net unrealized gains  or losses on  fixed-maturity investment  securities).
The debt to  tangible equity ratio  at September 30,  1996 was 6.22  due to
lower levels of debt resulting from the net decline in finance receivables,
which management considers  to be  temporary.  (See  Analysis of  Operating
Results herein.)   Certain of AGFC's financing agreements effectively limit
the amount of  dividends AGFC may pay; however,  management does not expect
those limits  to affect  AGFC's  ability to  pay  the amount  of  dividends
necessary to maintain the Company's targeted leverage.


Capital Resources

The  Company's capital  requirements vary  directly with  the level  of net
finance  receivables.  The mix of capital  between debt and equity is based
primarily upon  maintaining leverage that supports  cost-effective funding.
At  September  30,  1996,  the  Company's  capital  totaled  $8.5  billion,
consisting of $7.1 billion of debt and $1.4 billion of  equity, compared to
$8.8 billion at September 30, 1995,  consisting of $7.4 billion of debt and
$1.4 billion of equity.

The Company obtains funds through  the issuance of a combination of  fixed-
rate  debt,  principally  long-term, and  floating-rate  debt,  principally
short-term.  AGFC and  one of its subsidiaries sell  commercial paper notes
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<PAGE> 8

with maturities  ranging from  1 to 270  days directly to  banks, insurance
companies, corporations, and other institutional investors.   AGFC may also
offer medium-term notes with  original maturities of nine months  or longer
to certain institutional  investors.   The remainder of  AGFC's funding  is
obtained  primarily  through   underwritten  public  debt  offerings   with
maturities generally ranging from three to ten years. 

The Company's mix  of fixed-rate  and floating-rate debt  is determined  by
management based,  in part, on  the nature of  the assets  being supported.
The Company limits its exposure to market interest rate increases by fixing
interest  rates that it pays for term  periods.  The primary means by which
the Company accomplishes this  is through the issuance of  fixed-rate debt.
To supplement  fixed-rate  debt  issuances,  AGFC also  has  used  interest
conversion agreements  to synthetically create fixed-rate  debt by altering
the  nature  of floating-rate  funding,  thereby limiting  its  exposure to
interest rate movements.


Credit Facilities

Credit  facilities  are maintained  to support  the issuance  of commercial
paper   and  to  provide  an  additional  source  of  funds  for  operating
requirements.   At  September 30,  1996, the  Company had  committed credit
facilities  of $700.0  million  and was  an  eligible borrower  under  $2.8
billion of  committed credit  facilities extended  to American  General and
certain of  its  subsidiaries (the  "shared  committed facilities").    The
annual commitment fees  for all  committed facilities ranged  from .05%  to
 .09%.   The Company pays only  an allocated portion of  the commitment fees
for the  shared committed facilities.   At September 30, 1996,  the Company
also  had  $371.0  million of  uncommitted  credit  facilities  and was  an
eligible  borrower under  $165.0 million  of uncommitted  credit facilities
extended  to American General and  certain of its  subsidiaries.  Available
borrowings  under all  facilities are  reduced by  any  amounts outstanding
thereunder.   At September 30,  1996, Company borrowings  outstanding under
all credit facilities totaled $11.5 million with  remaining availability to
the Company of $3.5 billion  in committed facilities and $524.5 million  in
uncommitted facilities.


Securitization

The Company has securitized a portion of its portfolio of private label and
credit card finance receivables to  establish additional sources of funding
and liquidity.   During the second  quarter of 1995, the  Company sold $100
million  of  securitized finance  receivables  with limited  recourse.   At
September 30, 1996, securitized  finance receivables sold remained at  $100
million.
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                       SELECTED FINANCIAL INFORMATION


The following table  sets forth certain  selected financial information  of
the Company for the periods indicated:

                                 At or for the            At or for the
                              Three Months Ended        Nine Months Ended
                                 September 30,            September 30,    
                             1996            1995     1996            1995 
                                        (dollars in thousands)
Average finance receivables, 
  net of unearned finance
  charges (average net
  receivables)              $7,851,785  $8,386,605   $7,897,039  $8,225,527

Average borrowings          $6,878,614  $7,302,448   $6,951,355  $7,164,824

Yield - finance charges
  (annualized) as a
  percentage of average
  net receivables               17.79%      18.20%       18.01%      18.03%

Borrowing cost - interest
  expense (annualized) as 
  a percentage of average
  borrowings                     6.89%       7.03%        6.92%       7.04%

Spread between yield
  and borrowing cost            10.90%      11.17%       11.09%      10.99%

Insurance revenues
  (annualized) as a
  percentage of average
  net receivables                2.63%       2.63%        2.62%       2.69%

Operating expenses
  (annualized) as a
  percentage of average
  net receivables                6.08%       5.81%        6.31%       5.59%

Return on average assets 
  (annualized)                   2.05%       2.35%        1.61%       2.59%

Return on average equity
  (annualized)                  13.02%      15.55%       10.27%      17.22%

Charge-off ratio -
  net charge-offs
  (annualized) as a
  percentage of average
  net receivables                5.42%       3.22%        5.44%       2.99%

Allowance ratio - 
  allowance for finance
  receivable losses as a
  percentage of net
  finance receivables              -           -          5.68%       3.62%
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Selected Financial Information (Continued)


                                                       At or for the
                                                     Nine Months Ended
                                                       September 30,  
                                                     1996        1995 

Ratio of earnings to fixed charges (refer to
  Exhibit 12 herein for calculations)                1.47        1.67

Delinquency ratio - finance receivables any
  portion of which was 60 days or more past
  due as a percentage of related receivables
  (including unearned finance charges and
  excluding deferred origination costs, a
  fair value adjustment on finance receivables,
  and accrued interest)                              4.29%       3.75%

Debt to tangible equity ratio - debt to
  equity less goodwill and net unrealized
  gains or losses on fixed-maturity
  investment securities                              6.22        6.47

Debt to equity ratio                                 5.00        5.10



                       ANALYSIS OF OPERATING RESULTS

Net  income  decreased $9.8  million, or  17%, for  the three  months ended
September 30,  1996 and $71.2  million, or 39%,  for the nine  months ended
September 30, 1996 when compared to the same periods in 1995.  The decrease
in  net income for the quarter  was primarily due to  a decrease in finance
charges and an increase in the provision for income taxes, partially offset
by a decrease in the provision for finance receivable losses.  The decrease
in net income for the nine month  period was primarily due  to increases in
the provision for finance receivable losses and operating expenses, as well
as a decrease in finance charges.

Operating  results  during  1996  have  been  below  Company   expectations
primarily due to the decline in credit fundamentals in the consumer finance
market,  including the record  level of personal  bankruptcies.  Operations
have,  however, begun  to benefit  from actions  taken to  stabilize credit
quality, including  the elimination  of certain  underperforming non-branch
marketing programs, the establishment of higher underwriting standards, and
revisions to the field  office incentive compensation system.   The Company
will introduce additional programs  during 1996 and 1997 to  address credit
quality, finance receivable originations, and expense reduction.


Finance Charges

Finance  charge  revenues decreased  $33.0 million,  or  9%, for  the three
months ended  September 30, 1996  and $44.9  million, or 4%,  for the  nine
months  ended September 30, 1996 when compared  to the same periods in 1995
primarily due  to a decrease in  average net receivables.   The decrease in
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<PAGE> 11

finance  charge revenues  for the  quarter was  also due  to a  decrease in
yields.  The decrease in finance charge revenues for the  nine month period
was partially offset by an  additional day in the 1996 period.  Average net
receivables decreased $534.8  million, or  6%, for the  three months  ended
September 30, 1996  and $328.5 million,  or 4%, for  the nine months  ended
September 30, 1996 when compared to  the same periods in 1995 primarily due
to  the AGFC dividend of the common  stock of two subsidiaries operating in
Alabama to  AGFI on  December 31,  1995 and the  action program  to improve
credit  quality.   (See Provision  for  Finance Receivable  Losses herein.)
Yields decreased 41 basis points for  the three months ended September  30,
1996 and 2 basis points for the  nine months ended September 30, 1996  when
compared to the same periods  in 1995 primarily due to a  larger proportion
of the finance receivable  portfolio in  real estate secured  loans and the
increased  proportion of  finance receivables  90+ days delinquent  and the
suspension of  accrued finance charges  thereon.  The decrease in yield for
the nine month period was partially  offset by an increase in yield on real
estate loans, resulting from the  higher interest rate environment and rate
management.


Insurance Revenues

Insurance  revenues decreased  $3.6 million,  or 6%,  for the  three months
ended  September 30,  1996 and $10.9  million, or  7%, for  the nine months
ended  September  30,  1996  when compared  to  the  same  periods in  1995
primarily due to a  decrease in earned premiums.  Earned premiums decreased
primarily  due to a decrease in net  written premiums.  The decrease in net
written premiums reflected the decrease in loan volume, which resulted from
the action program to improve credit quality.


Other Revenues

Other revenues  increased $.7 million,  or 4%, for  the three  months ended
September  30, 1996  and $3.8  million, or  6%, for  the nine  months ended
September 30, 1996 when compared to the same periods in  1995 primarily due
to an  increase in interest revenue  on notes receivable from  parent.  The
increase  in interest revenue on notes receivable from parent resulted from
the  AGFC dividend of  the common  stock of  two subsidiaries  operating in
Alabama to AGFI.  AGFI provides funding for the assets  transferred through
a demand note with AGFC.  The increase in other revenues for the nine month
period  was partially offset by the gain  recorded in the second quarter of
1995  for  the  securitized finance  receivables  sold  and  a decrease  in
investment revenue  on the  invested assets for  the insurance  operations.
The decrease in investment revenue was primarily due to  realized losses on
investments of $1.6 million  for the nine  months ended September 30,  1996
compared  to $.7  million of  realized gains  on  investments for  the same
period in 1995.   Investment revenue for the  three months ended  September
30, 1996 remained at near the same  level when compared to the same  period
in 1995.  Return on invested assets decreased 54 basis points for the three
months ended September  30, 1996 and  34 basis points  for the nine  months
ended September 30, 1996 when compared  to the same periods in 1995, offset
by growth in average invested assets of $55.1 million, or 7%, for the three
months  ended September  30, 1996 and  $69.0 million,  or 9%,  for the nine
months ended September 30, 1996 when  compared to the same periods in 1995.
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<PAGE> 12

Interest Expense

Interest  expense decreased  $12.5 million,  or 10%,  for the  three months
ended September  30, 1996  and $17.2  million, or 5%,  for the  nine months
ended September 30, 1996 when compared to  the same periods in 1995 due  to
decreases in  average borrowings  and borrowing  cost.  Average  borrowings
decreased $423.8 million, or 6%, for  the three months ended September  30,
1996 and $213.5  million, or 3%,  for the nine  months ended September  30,
1996  when compared  to  the same  periods  in 1995  primarily  due to  the
decrease in average net receivables.  The borrowing cost decreased 14 basis
points for  the three months ended  September 30, 1996 and  12 basis points
for the  nine months  ended September  30, 1996 when  compared to  the same
periods in  1995 due to a decrease in short-term borrowing cost, with long-
term borrowing cost remaining near the same level.


Operating Expenses

Operating  expenses decreased  $2.4 million,  or 2%,  for the  three months
ended  September 30, 1996 and increased $28.6  million, or 8%, for the nine
months ended September 30, 1996 when  compared to the same periods in 1995.
The decrease in operating expenses for the quarter was primarily due to the
action programs to improve credit  quality and  reduce expenses,  partially
offset by the decrease in deferral of finance receivable origination costs.
The increase in operating expenses for the nine month  period was primarily
due to the  decrease in deferral  of finance receivable  origination costs,
growth in the business  that occurred in  the first three  quarters of 1995
and in 1994, and collection efforts  on the increased  level of  delinquent
finance  receivables.  The  fluctuations  in the  business  experienced  in
recent years have resulted in corresponding changes in operational staffing
and other operating expenses.   

Since late 1995, certain underperforming marketing initiatives have  either
been  restructured  or  discontinued.    Certain  non-recurring   operating
expenses associated  with the discontinued initiatives  negatively impacted
the  financial  results during  1996 by  $8.5  million.   The comprehensive
review of the Company initiated in fourth quarter 1995 and  the decrease in
finance  receivables  during 1996  resulted  in  a workforce  reduction  of
approximately  750  positions  through  third  quarter  1996.    Management
believes the improvement programs  implemented in late 1995 and  throughout
1996 will lead to improved operating efficiencies.


Provision for Finance Receivable Losses

In recent years,  the Company's  operational strategy had  been focused  on
improving its risk-adjusted returns by  extending credit to customers  with
risk characteristics  somewhat higher than those  traditionally serviced by
the  Company.    As expected,  this  strategy  adversely  influenced credit
quality.  However, beginning in the third quarter  of 1995, the delinquency
ratios  and  the  charge-off  ratios  experienced by  the  Company  sharply
increased  to greater than anticipated  levels.  Due  to these increases in
delinquencies  and net charge-offs,  a comprehensive review  of the Company
was  initiated in  the fourth quarter  of 1995.   This  review consisted of
extensive  internal   analysis,  together  with  finance   receivable  loss
development projections  supplied  by  outside  credit  consultants.    The
results  of the analysis indicated a need  for an increase in the allowance
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<PAGE> 13

for finance receivable losses.   Accordingly, a $216.0 million  increase in
the  allowance for finance receivable losses was recorded in fourth quarter
1995.  

In addition, the  Company adopted  an action program  for improving  credit
quality that included  raising underwriting standards, expanding the use of
credit scoring, slowing branch expansion,  stressing collections, improving
branch office training,  and rebalancing the  finance receivable  portfolio
credit  risk.  Strategies for rebalancing the portfolio credit risk include
slowing growth, de-emphasizing some higher risk portfolios,  and increasing
the proportion of real estate secured receivables.

At  September 30,  1996, net  finance receivables  totaled $8.0  billion, a
decrease of  $179.8 million from the  balance at December 31,  1995, but an
increase of $163.0 million from the balance at June 30,  1996 primarily due
to an increase in real  estate loans.  As part of the Company's strategy to
rebalance  its finance receivable portfolio, the Company purchased a $200.5
million portfolio and  a $276.1  million portfolio of  real estate  secured
finance  receivables in the second and third quarter of 1996, respectively.
At  September 30, 1996,  real estate secured  finance receivables accounted
for 42% of total finance receivables compared to 34% at September 30, 1995.

Provision for  finance receivable losses  decreased $24.6 million,  or 22%,
for the three months ended September 30, 1996 and increased $35.4  million,
or 14%, for the  nine months ended September 30, 1996  when compared to the
same periods in  1995.   The decrease in  provision for finance  receivable
losses  for the  quarter was  primarily due  to a  decrease in  the amounts
provided for the allowance for  finance receivable losses, partially offset
by an increase in net  charge-offs.  The increase in provision  for finance
receivable losses  for  the  nine month  period  was primarily  due  to  an
increase in net  charge-offs, partially offset by a decrease in the amounts
provided for the allowance for finance receivable losses. 

Net charge-offs for the three months ended September 30,  1996 increased to
$105.9 million from $67.4 million for the same period in 1995.  Net charge-
offs for  the three months  ended June 30,  1996 were $105.2 million.   The
charge-off ratio for  third quarter  1996 was 5.42%  compared to 5.38%  for
second quarter 1996 and 3.22% for third quarter 1995.

At September 30, 1996, delinquencies were $372.1 million compared to $342.7
million  at June 30,  1996 and $351.2  million at September 30,  1995.  The
delinquency  ratio  increased from  4.01%  at  June 30,  1996  to 4.29%  at
September 30, 1996 (compared to 3.75% at September 30, 1995).

The allowance for  finance receivable losses  decreased $17.0 million  from
$472.3 million  at June 30, 1996  to $455.3 million at  September 30, 1996.
The allowance  ratio at September 30,  1996 was 5.68% compared  to 6.01% at
June  30,  1996.   The  current  allowance  for  finance receivable  losses
reflects  the effects  of  the higher  percentage  of real  estate  secured
finance  receivables.   Based upon  an analysis  of the  finance receivable
portfolio, management believes  that the allowance  for finance  receivable
losses is adequate given the current level of delinquencies and net charge-
offs.

Management believes  the improvement programs  implemented in late 1995 and
throughout 1996,  which emphasize  continued improvements  in underwriting,
intensified collections,  increased emphasis  on real estate secured loans,
and investment  in risk  management  technology,  will address  the overall
<PAGE>
<PAGE> 14

credit quality issues.  However, delinquencies have remained at higher than
expected levels, indicating that  charge-offs may continue above historical
levels  for the near  term, rather than  moderating  during  fourth quarter
1996,  as previously  expected.   In addition,  adverse  changes in  credit
fundamentals  within the  consumer  finance  market,  including  the recent
increase  in the level  of personal  bankruptcies, could negatively  impact
expected results. 


Insurance Losses and Loss Adjustment Expenses

Insurance  losses and loss  adjustment expenses decreased  $6.3 million, or
20%, for  the three months ended  September 30, 1996 and  $11.0 million, or
12%, for the nine months ended September 30, 1996 when compared to the same
periods in  1995 due to decreases  in provision for future  benefits and in
claims paid.  Provision for future benefits decreased $3.1  million for the
quarter and $10.1 million for the nine month period due to reduced sales of
non-credit insurance products.  Claims  for the three month and  nine month
periods decreased $3.2 million and $.9 million, respectively, primarily due
to a decrease in loss experience on credit insurance. 


Provision for Income Taxes

The provision  for income taxes increased  $19.8 million, or 318%,  for the
three months ended September 30, 1996 and  decreased $16.7 million, or 21%,
for the  nine months ended  September 30,  1996 when compared  to the  same
periods in  1995.   The  increase in  provision for  income  taxes for  the
quarter was primarily due to a  state income tax adjustment recorded in the
third quarter of 1995 and higher taxable income.  The decrease in provision
for  income taxes  for the  nine month  period was  primarily due  to lower
taxable  income,  partially  offset  by the  state  income  tax  adjustment
previously discussed. 


Forward-looking Statements

The  statements  contained  in  this  filing  on  Form  10-Q that  are  not
historical facts are  forward-looking statements within the meaning  of the
Private Securities  Litigation  Reform  Act.   Actual  results  may  differ
materially from  those included in  the forward-looking statements.   These
forward-looking  statements involve risks  and uncertainties including, but
not limited to,  the following:   changes in  general economic  conditions,
including  the performance  of financial  markets, interest rates,  and the
level  of personal  bankruptcies; competitive,  regulatory, or  tax changes
that affect  the cost  of or  demand for  the  Company's products;  adverse
litigation results; and failure to achieve the Company's anticipated levels
of  expense savings  from cost-saving  initiatives.   The  Company's future
results  also could be adversely  affected if finance  receivable volume is
lower than  anticipated or if, despite the Company's initiatives to improve
credit  quality,  finance  receivable  delinquencies  and  net  charge-offs
increase or remain at current levels  for a longer period than  anticipated
by  management.    Investors  are  also   directed  to   other   risks  and
uncertainties  discussed  in  documents  filed  by  the  Company  with  the
Securities and Exchange Commission.
<PAGE>
<PAGE> 15

                        PART II - OTHER INFORMATION


Item 1.  Legal Proceedings.

In addition to  those lawsuits  or proceedings disclosed  in the  Company's
1995 Form 10-K, AGFC and certain of its subsidiaries are parties to various
other  lawsuits and proceedings arising in the ordinary course of business.
Many  of these  lawsuits and  proceedings arise  in jurisdictions,  such as
Alabama,  that permit damage awards disproportionate to the actual economic
damages incurred.   Based upon information presently available, the Company
believes  that the  total amounts  that ultimately  will be  paid, if  any,
arising from these lawsuits  and proceedings will have no  material adverse
effect on the  Company's consolidated results  of operations and  financial
position.  However,  it should be noted that the  frequency of large damage
awards,  including large  punitive damage  awards, that  bear little  or no
relation to actual economic damages incurred by plaintiffs in jurisdictions
like  Alabama  continues  to increase  and  creates  the  potential for  an
unpredictable judgment in any given suit.



Item 6.  Exhibits and Reports on Form 8-K.

(a)  Exhibits.

     (12)  Computation of Ratio of Earnings to Fixed Charges.
     (27)  Financial Data Schedule.

(b)  Reports on Form 8-K.

     Current  Report on Form  8-K dated  July 23, 1996, with  respect to the
     issuance of an Earnings  Release announcing certain unaudited financial
     results of the Company for the quarter ended June 30, 1996.

     Current Report on Form 8-K dated October 22, 1996, with respect to  the
     issuance of an Earnings  Release announcing certain unaudited financial
     results of the Company for the quarter ended September 30, 1996.
<PAGE>
<PAGE> 16

                                 Signature



Pursuant to  the requirements of the  Securities Exchange Act of  1934, the
registrant has  duly caused this report  to be signed on its  behalf by the
undersigned thereunto duly authorized.


                                  AMERICAN GENERAL FINANCE CORPORATION     
                                              (Registrant)                 



Date:  November 13, 1996          By /s/ John S. Poelker                   
                                         John S. Poelker                
                                     Senior Vice President and Chief
                                       Financial Officer                 
                                     (Duly Authorized Officer and Principal
                                       Financial Officer)               
<PAGE>
<PAGE> 17

                               Exhibit Index



      Exhibits                                                      Page

(12)  Computation of Ratio of Earnings to Fixed Charges.             18

(27)  Financial Data Schedule.                                       19
<PAGE>