<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               March 31, 1998              

                                     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 May  14, 1998, there were  10,160,012 shares of  the registrant's common
stock, $.50 par value, outstanding.
<PAGE>
<PAGE> 2

                      PART I - FINANCIAL INFORMATION


Item 1.   Financial Statements


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

<CAPTION>
                                               Three Months Ended
                                                    March 31,      
                                               1998          1997  
                                             (dollars in thousands)
<S>                                          <C>           <C>
Revenues
  Finance charges                            $319,017      $311,590
  Insurance                                    42,961        47,529
  Other                                        23,653        21,264

Total revenues                                385,631       380,383

Expenses
  Interest expense                            119,304       109,862
  Operating expenses                          122,615       114,495
  Provision for finance
    receivable losses                          47,867        65,808
  Insurance losses and loss
    adjustment expenses                        22,037        24,004

Total expenses                                311,823       314,169

Income before provision for
  income taxes                                 73,808        66,214

Provision for Income Taxes                     27,802        24,453


Net Income                                   $ 46,006      $ 41,761


<FN>
<F1>
See Notes to Condensed Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>
<PAGE> 3
<TABLE>
           AMERICAN GENERAL FINANCE CORPORATION AND SUBSIDIARIES
                   Condensed Consolidated Balance Sheets
                                (Unaudited)

<CAPTION>
                                             March 31,     December 31,
                                                1998            1997   
                                               (dollars in thousands) 
<S>                                          <C>             <C>
Assets

Finance receivables, net of unearned
  finance charges:
    Real estate loans                        $4,210,237      $4,067,500
    Non-real estate loans                     2,425,467       2,502,051
    Retail sales finance                      1,243,608       1,257,485

Net finance receivables                       7,879,312       7,827,036
Allowance for finance receivable
  losses                                       (358,126)       (363,126)
Net finance receivables, less allowance
  for finance receivable losses               7,521,186       7,463,910

Investment securities                           953,873         928,411
Cash and cash equivalents                        98,134          91,076
Notes receivable from parent                    177,688         185,028
Other assets                                    626,606         572,180

Total assets                                 $9,377,487      $9,240,605


Liabilities and Shareholder's Equity

Long-term debt                               $4,005,665      $3,941,486
Short-term notes payable:
  Commercial paper                            3,201,532       3,157,671
  Banks and other                                 2,650             -  
Insurance claims and policyholder
  liabilities                                   429,144         436,859
Other liabilities                               298,218         308,601
Accrued taxes                                    46,535          21,073

Total liabilities                             7,983,744       7,865,690

Shareholder's equity:
  Common stock                                    5,080           5,080
  Additional paid-in capital                    718,914         718,914
  Accumulated other comprehensive    
    income                                       33,648          34,512 
  Retained earnings                             636,101         616,409

Total shareholder's equity                    1,393,743       1,374,915

Total liabilities and shareholder's equity   $9,377,487      $9,240,605
<FN>
<F1>
See Notes to Condensed Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>
<PAGE> 4
<TABLE>
           AMERICAN GENERAL FINANCE CORPORATION AND SUBSIDIARIES
              Condensed Consolidated Statements of Cash Flows
                                (Unaudited)

<CAPTION>
                                                      Three Months Ended
                                                           March 31,      
                                                      1998          1997  
                                                    (dollars in thousands)
<S>                                                 <C>           <C>
Cash Flows from Operating Activities
Net income                                          $ 46,006      $ 41,761
Reconciling adjustments to net cash
  provided by operating activities:
    Provision for finance receivable losses           47,867        65,808
    Depreciation and amortization                     22,378        18,933
    Deferral of finance receivable  
      origination costs                              (10,230)       (9,645)
    Deferred federal income tax (benefit) charge      (1,903)        1,913 
    Change in other assets and other liabilities     (16,037)       11,256
    Change in insurance claims and
      policyholder liabilities                        (7,715)      (16,883)
    Change in taxes receivable and payable            51,465        24,526 
    Operations related to assets held for sale           -          20,108 
    Other, net                                           980         9,200 
Net cash provided by operating activities            132,811       166,977

Cash Flows from Investing Activities
  Finance receivables originated or purchased     (1,247,839)     (984,740)
  Principal collections on finance receivables     1,121,564     1,057,244
  Net collections on assets held for sale                -          35,337
  Advances for purchases of finance receivables      (22,240)         (855)
  Investment securities purchased                    (65,710)      (43,078)
  Investment securities called, matured and sold      41,296        37,623
  Transfer of fixed assets from affiliate            (18,844)          - 
  Change in notes receivable from parent
    and affiliates                                     7,340        (3,877)
  Other, net                                         (25,086)         (688)
Net cash (used for) provided by
  investing activities                              (209,519)       96,966 

Cash Flows from Financing Activities
  Proceeds from issuance of long-term debt           536,270           -  
  Repayment of long-term debt                       (472,701)     (205,500)
  Change in short-term notes payable                  46,511       (72,215)
  Capital contribution from parent                       -          16,000
  Dividends paid                                     (26,314)          -  
Net cash provided by (used for)
  financing activities                                83,766      (261,715)

Increase in cash and cash equivalents                  7,058         2,228 
Cash and cash equivalents at beginning of period      91,076        90,197

Cash and cash equivalents at end of period          $ 98,134      $ 92,425


Supplemental Disclosure of Cash Flow Information
  Income taxes received                             $(22,335)     $ (3,952)
  Interest paid                                     $136,124      $126,549
<FN>
<F1>
See Notes to Condensed Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>
<PAGE> 5
<TABLE>
           AMERICAN GENERAL FINANCE CORPORATION AND SUBSIDIARIES
         Condensed Consolidated Statements of Comprehensive Income
                                (Unaudited)

<CAPTION>
                                                       Three Months Ended
                                                            March 31,      
                                                       1998          1997  
                                                     (dollars in thousands)

<S>                                                  <C>            <C>
Net income                                           $46,006        $41,761

Other comprehensive income:
  Net unrealized losses on investment securities      (1,327)       (19,662)
  Income tax effect                                      464          6,881 

  Net unrealized losses on investment securities,
    net of tax                                          (863)       (12,781)

  Reclassification adjustment for realized
    gains included in net income                          (2)           (82)
  Income tax effect                                        1             29 

  Realized gains included in net income, net of tax       (1)           (53)

Other comprehensive income, net of tax                  (864)       (12,834)


Comprehensive income                                 $45,142        $28,927


<FN>
<F1>
See Notes to Condensed Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>
<PAGE> 6

           AMERICAN GENERAL FINANCE CORPORATION AND SUBSIDIARIES
            Notes to Condensed Consolidated Financial Statements
                               March 31, 1998



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
will  be  referred to  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 March  31, 1998 and December 31, 1997, its consolidated results
of  operations for  the three  months ended  March 31,  1998 and  1997, its
consolidated cash flows for the three months ended March 31, 1998 and 1997,
and  its consolidated comprehensive income for the three months ended March
31, 1998  and  1997.   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, 1997.  

To conform  with the 1998  presentation, certain items  in the prior period
have been reclassified.


Note 3.  Accounting Changes

As  of  January  1,  1998,  the  Company  adopted  Statement  of  Financial
Accounting Standards  (SFAS) 130,  "Reporting Comprehensive Income",  which
resulted in  reporting  comprehensive  income and  its  components  in  the
Company's financial  statements.   SFAS 130  requires unrealized  gains and
losses on the Company's investment securities, which prior to adoption were
reported separately in shareholder's equity, to be included in  accumulated
other   comprehensive  income.    Adoption  of  SFAS  130  did  not  change
recognition or measurement of net income and, therefore, did not impact the
Company's consolidated results of operations or  financial position.  Prior
year  financial  statements  have  been  reclassified  to  conform  to  the
requirements of SFAS 130.
<PAGE>
<PAGE> 7

In June 1997,  the Financial  Accounting Standards Board  issued SFAS  131,
"Disclosures about  Segments of  an  Enterprise and  Related  Information",
which changes the way companies report segment information.  This statement
is effective for years beginning  after December 15, 1997, but need  not be
applied to interim financial statements in the initial year of application.
Restatement of  comparative information for  all periods presented  will be
required upon adoption.   Adoption of  this statement  will result in  more
detailed  disclosures  but  will  not  have  an  impact  on  the  Company's
consolidated results of operations or financial position.


Note 4.  Derivative Financial Instruments

AGFC  makes limited use of  derivative financial instruments  to manage the
cost  of  its debt  and  is neither  a dealer  nor  a trader  in derivative
financial instruments.  AGFC's use  of derivative financial instruments  is
generally limited to interest rate swap and treasury rate lock agreements.

AGFC  uses interest rate swap agreements  to reduce its exposure to adverse
future  fluctuations in  interest expense  rates by  effectively converting
short-term and certain long-term floating-rate debt to a  fixed-rate basis.
Interest  rate swap agreements in which AGFC  contracted to pay interest at
fixed rates and receive  interest at floating rates totaled  $940.0 million
in notional amount at March 31, 1998, with a weighted average interest rate
payable of 7.39% and a weighted average interest rate receivable  of 5.52%.

Treasury rate lock agreements are used  to hedge against the risk of rising
interest rates on  anticipated long-term debt issuances.   These agreements
provide for future cash  settlements that are a function of  specified U.S.
Treasury rates.   During fourth  quarter 1997, AGFC  entered into  treasury
rate lock agreements with settlement dates in 1998.  At March 31, 1998, the
notional amount of these agreements was $192.0 million.

AGFC's use  of interest rate swap and treasury rate lock agreements did not
have a material effect on  the Company's weighted average interest rate  or
reported interest expense in the first three months of 1998 or 1997.


Note 5.  Assets Held For Sale

During fourth  quarter 1996, the  Company decided to offer  for sale $874.8
million  of non-strategic,  underperforming finance  receivable portfolios,
consisting of $520.3 million of  credit card and $354.5 million  of private
label  finance  receivables.    The  Company  reclassified  these   finance
receivables and $70.0 million of allowance for finance receivable losses to
assets held for sale on December 31, 1996.

The Company  hired an outside advisor  to market the portfolios.   Based on
negotiations with prospective  purchasers subsequent to year end  1996, the
Company  determined  that a  write-down  of $137.0  million  ($88.1 million
aftertax) at December 31, 1996 was necessary  to reduce the carrying amount
of the  assets held for  sale to  net realizable  value, after  considering
related expenses.
<PAGE>
<PAGE> 8

In April 1997, the Company repurchased $100.0 million  of private label and
credit card  finance  receivables that  previously  had been  sold  through
securitization.   No gain or  loss resulted from  this transaction.   These
repurchased credit card  finance receivables  were offered  for sale  along
with  the Company's other credit card  finance receivables, which increased
the  carrying amount of assets held for sale by approximately $70.0 million
in April 1997.

In June  1997, the Company  sold all of  the assets held  for sale  (with a
remaining balance of  $658.1 million)  and $81.4 million  of other  private
label finance receivables.   In  connection with these  sales, the  Company
recorded a loss of $42.2 million ($27.0 million aftertax) in second quarter
1997.    This loss  primarily resulted  from  establishing a  liability for
estimated future payments  to the  purchaser of the  credit card  portfolio
under a five-year loss sharing arrangement.



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
securitized finance  receivables.   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 $132.8  million for the  three months ended
March 31, 1998 compared to $167.0 million for the same period in 1997.  The
decrease in operating cash flow for  the three months  ended March 31, 1998
when compared to the same  period in 1997 was primarily due  to the sale of
non-strategic assets in June 1997.  Operating  cash flow combined with  the
net  proceeds  from issuance  of debt generated cash flow of $242.9 million
for the  three  months  ended  March 31,  1998.  This cash  flow  was  used
principally  to finance  the  net originations  and  purchases  of  finance
receivables  of  $126.3  million  and  to pay  dividends  to AGFI  of $26.3
million.  Operating  cash flow combined with the net collections of finance
receivables  and assets held for  sale and a capital contribution  of $16.0
million  from  AGFI  generated  cash flow  of $290.8  million for the three
months ended  March 31, 1997.  This cash flow  was used principally to fund
the net repayments of debt of $277.7 million.

Dividends are  typically paid to manage the  Company's leverage to a target
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 March 31, 1998  was 6.51 to 1.  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 maintain the Company's targeted leverage.  
<PAGE>
<PAGE> 9

Capital Resources

The  Company's capital  requirements vary  directly with  the level  of net
finance receivables.   The targeted mix of  capital between debt and equity
is based  primarily upon maintaining leverage  that supports cost-effective
funding.   At March  31, 1998, the Company's  capital totaled $8.6 billion,
consisting of $7.2 billion of debt  and $1.4 billion of equity, compared to
$8.5 billion at March 31, 1997, consisting of $7.1 billion of debt and $1.4
billion of equity.

The Company issues 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 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.    AGFC obtains  the remainder  of  its capital  funds primarily
through  underwritten  public  debt  offerings  with  maturities  generally
ranging from three to ten years. 

The Company manages anticipated cash flows of its assets and liabilities in
an  effort  to  reduce the  risk  associated  with  unfavorable changes  in
interest rates.  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 uses interest rate swap agreements to  synthetically create fixed-rate
debt  by altering the nature of floating-rate funding, thereby limiting its
exposure  to adverse  interest  rate movements.    In addition,  AGFC  uses
treasury rate lock agreements to hedge  against the risk of rising interest
rates on anticipated long-term debt issuances.


Credit Facilities

The  Company participates in credit  facilities to support  the issuance of
commercial paper and to provide an additional source of funds for operating
requirements.   At  March 31, 1998,  the Company  was an  eligible borrower
under  $4.8 billion  of committed  credit facilities  extended to  American
General  and   certain  of   its   subsidiaries  (the   "shared   committed
facilities").    The  annual  commitment  fees  for  the  shared  committed
facilities ranged  from .05% to .07%.   The Company pays  only an allocated
portion of the commitment fees for such committed facilities.  At March 31,
1998,  the Company also had $141.0 million of uncommitted credit facilities
and was an  eligible borrower  under $200.0 million  of uncommitted  credit
facilities extended to  American General and  certain of its  subsidiaries.
Available borrowings  under all facilities  are reduced by  any outstanding
borrowings.  At March 31,  1998, there were no borrowings under  any credit
facilities.
<PAGE>
<PAGE> 10

Securitization

In April 1997, the  Company repurchased all $100.0  million of the  private
label and credit  card finance  receivables that had  previously been  sold
through  securitization.   No  gain or  loss  resulted from  the repurchase
transaction.   Of  the  $100.0  million  repurchased,  approximately  $70.0
million  was  classified as  assets  held  for sale  in  April  1997.   The
repurchase  facilitated the sale of  the credit card  portfolio included in
assets held for sale and sold in June 1997.  


Year 2000 Contingency

The Company is in the process of  modifying its computer systems to be Year
2000 compliant.  During the first quarter of 1998, the Company incurred and
expensed $.1 million related to  this project.  The Company  estimates that
it  will  incur  future costs  in  excess  of $6.2  million  for additional
internal  staff, third-party  vendors,  and other  expenses  to render  its
systems Year 2000 compliant.

The Company  expects to  substantially complete  this project  during 1998.
However,  risks  and  uncertainties  exist  in  most  significant   systems
development  projects.   If  conversion of  the  Company's systems  is  not
completed on a timely  basis, due to nonperformance by  third-party vendors
or  other  unforeseen  circumstances, the  Year  2000  issue  could have  a
material adverse impact on the operations of the Company.
<PAGE>
<PAGE> 11

                       SELECTED FINANCIAL INFORMATION


The following table shows selected financial information of the Company:

                                                         At or for the
                                                      Three Months Ended
                                                           March 31,       
                                                     1998            1997  
                                                    (dollars in thousands)
Average finance receivables net
  of unearned finance charges
  (average net receivables)                        $7,818,487    $7,363,221

Average borrowings                                 $7,113,312    $7,303,721

Yield - finance charges (annualized)
  as a percentage of average net
  receivables                                          16.47%        17.07%

Borrowing cost - interest expense
  (annualized) as a percentage of
  average borrowings                                    6.73%         6.73%

Interest spread - yield less
  borrowing cost                                        9.74%        10.34%

Insurance revenues (annualized) as
  a percentage of average net 
  receivables                                           2.20%         2.58%

Operating expenses (annualized) as
  a percentage of average net 
  receivables                                           6.27%         6.22%

Return on average assets 
  (annualized)                                          1.98%         1.78%

Return on average equity
  (annualized)                                         13.20%        12.35%

Charge-off ratio - net charge-offs
  (annualized) as a percentage of
  the average of net finance
  receivables at the beginning
  of each month during the period                       2.71%         3.83%

Allowance ratio - allowance for
  finance receivable losses as a
  percentage of net finance
  receivables                                           4.55%         5.23%

Ratio of earnings to fixed charges 
  (refer to Exhibit 12 for
  calculations)                                         1.60          1.53
<PAGE>
<PAGE> 12

Selected Financial Information (Continued)


                                                          At or for the
                                                       Three Months Ended
                                                            March 31,    
                                                        1998        1997 

Delinquency ratio - finance receivables
  60 days or more past due as a
  percentage of related receivables                     3.52%       3.77%

Debt to tangible equity ratio - debt to
  equity less goodwill and net unrealized
  gains or losses on fixed-maturity
  investment securities                                 6.51        6.45

Debt to equity ratio                                    5.17        5.19


                       ANALYSIS OF OPERATING RESULTS

Net Income

Net income increased $4.2 million, or 10%, for the three months ended March
31, 1998 when compared to the same period in 1997.

The Company  experienced a significant decline in  credit quality beginning
in third quarter  1995.  Accordingly, the Company recorded a $216.0 million
increase in the allowance  for finance receivable losses in  fourth quarter
1995.  Since 1995, the Company has focused  on an action program to improve
credit quality.   The components  of this action  program included  selling
under-performing receivable portfolios, raising underwriting standards, and
rebalancing the portfolio to increase the proportion of real estate loans.
See Note 5. of  the Notes to Condensed Consolidated Financial Statements in
Item 1. for further information on  the sale of the Company's non-strategic
assets.

Results of  the action  program became  evident  in 1997  and continued  to
improve  the  Company's operating  results in  the  first quarter  of 1998.
Although yield decreased  60 basis points for the three  months ended March
31,  1998 when  compared to the  same period  in 1997,  this was  more than
offset  by a  112 basis  point improvement  in the  charge-off ratio.   The
delinquency ratio  also improved to 3.52%  at March 31, 1998  from 3.77% at
March 31, 1997.

Factors which  specifically affected the Company's operating results are as
follows:
<PAGE>
<PAGE> 13

Finance Charges

Finance charge revenues increased $7.4 million, or 2%, for the three months
ended March 31,  1998 when compared  to the same period  in 1997 due  to an
increase  in average  net receivables,  partially offset  by a  decrease in
yield.  Average  net receivables increased  $455.3 million, or 6%,  for the
three months ended March 31, 1998 when compared to the same period in  1997
primarily due to growth in real estate loans, partially offset  by the sale
of  certain  private  label receivables  in  second  quarter  1997.   Yield
decreased 60  basis points for the  three months ended March  31, 1998 when
compared to the same period in 1997 primarily due to  the larger proportion
of finance receivables  that are  real estate loans,  which generally  have
lower yields.


Insurance Revenues

Insurance revenues decreased  $4.6 million,  or 10%, for  the three  months
ended March 31, 1998 when compared to the same period in 1997 primarily due
to a decrease in earned premiums.   Earned premiums decreased primarily due
to a  decrease in related loan volume in  1996 and the first three quarters
of 1997.


Other Revenues

Other revenues increased $2.4 million,  or 11%, for the three months  ended
March  31, 1998 when compared  to the same period in  1997 primarily due to
increases in investment  revenue and interest  revenue on notes  receivable
from parent, partially offset by a  decrease in revenue on foreclosed  real
estate.   The increase  in investment  revenue for  the three  months ended
March 31, 1998 when compared  to the same period in 1997  was primarily due
to an increase in adjusted portfolio yield for the  insurance operations of
86  basis points and  growth in average  invested assets of  $47.0 million.
Realized gains and  losses remained at  near the same  level for the  three
months  ended March  31, 1998  when compared  to the  same period  in 1997.
Investment revenue reflects $1.5 million of  net gains on calls and tenders
on  investment securities that are included in adjusted portfolio yield for
the  three  months ended  March  31, 1998,  compared  to  $27,000 that  are
included in  realized gains and losses for the three months ended March 31,
1997.


Interest Expense

Interest expense  increased $9.4 million, or 9%, for the three months ended
March 31, 1998 when compared to the  same period in 1997 due to an increase
in  average  borrowings to  support  finance  receivable growth,  partially
offset by a reduction in  interest expense due to the assets held  for sale
being sold  in second quarter  1997.  The borrowing  cost of 6.73%  for the
three months  ended March 31, 1998  remained the same when  compared to the
same period in 1997.
<PAGE>
<PAGE> 14

Operating Expenses

Operating  expenses increased  $8.1 million,  or 7%,  for the  three months
ended March 31, 1998 when compared to the same period in 1997 primarily due
to increases in  salaries and benefits,  collections, data processing,  and
professional  services  expenses.   The increase  in salaries  and benefits
expense  reflects  an increase  in  incentive  program expenses,  partially
offset  by a workforce reduction of approximately 580 positions since March
31, 1997 which includes the effects of a net decrease of 29 branch offices.


Provision for Finance Receivable Losses

Provision for  finance receivable losses  decreased $17.9 million,  or 27%,
for the three months ended March 31, 1998 when  compared to the same period
in 1997 due to a decrease in net charge-offs.

Net  charge-offs for  the three months  ended March  31, 1998  decreased to
$52.9 million from  $70.8 million for the same period in 1997.  Net charge-
offs for the three months ended December 31,  1997 were $67.6 million.  The
charge-off ratio  for first quarter  1998 was  2.71% compared to  3.66% for
fourth quarter 1997 and 3.83% for first quarter 1997.   

At March 31,  1998, delinquencies  were $298.5 million  compared to  $303.7
million at  December 31, 1997  and $297.3 million at  March 31, 1997.   The
delinquency ratio at March 31, 1998 was 3.52% compared to 3.61% at December
31, 1997 and 3.77% at March 31, 1997. 

The  allowance for finance  receivable losses  decreased to  $358.1 million
from $380.3 million  at March 31, 1997.   The allowance ratio  at March 31,
1998 was  4.55% compared to 4.64% at  December 31, 1997 and  5.23% at March
31, 1997.  The decrease in the allowance ratio for each period reflects the
results  of the  action program  to improve  credit quality,  including the
increased  proportion  of real  estate loans.    The Company  maintains the
allowance  for finance  receivable  losses at  a  level based  on  periodic
evaluation of the finance receivable portfolio and reflects an amount that,
in  management's opinion, is adequate  to absorb anticipated  losses in the
existing portfolio. 


Insurance Losses and Loss Adjustment Expenses

Insurance losses  and loss adjustment  expenses decreased $2.0  million, or
8%, for the  three months ended  March 31, 1998  when compared to the  same
period in 1997  due to decreases  in provision for  future benefits and  in
claims paid.  Provision  for future benefits  decreased $.6 million due  to
reduced sales  of  non-credit insurance  products.   Claims decreased  $1.4
million primarily due to decreased business.  
<PAGE>
<PAGE> 15

Provision for Income Taxes

The  provision for income  taxes increased  $3.3 million,  or 14%,  for the
three months ended March 31, 1998 when compared to the  same period in 1997
primarily due to higher taxable income.  


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.   Forward-looking statements are
made based upon  management's current expectations  and beliefs  concerning
future  developments and their potential  effects upon the  Company.  There
can be no assurance that future developments affecting the Company will  be
those anticipated by management.  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;  the Company's ability  to render its  computer systems
Year  2000 compliant;  and  the Company's  failure  to achieve  anticipated
levels of expense savings  from cost-saving initiatives.  Readers  are also
directed to other risks  and uncertainties discussed in documents  filed by
the Company with the Securities and Exchange Commission.
<PAGE>
<PAGE> 16

                        PART II - OTHER INFORMATION


Item 1.  Legal Proceedings.

In addition to  those lawsuits  or proceedings disclosed  in the  Company's
1997 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 will  ultimately be  paid, if  any,
arising  from these  lawsuits  and proceedings  will  not have  a  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 January 9, 1998, with respect to  the
     authorization for issuance of  $200 million aggregate  principal amount
     of the Company's 5.90% Senior Notes due January 15, 2003.

     Current Report on Form 8-K dated January 27,  1998, with respect to the
     issuance of an Earnings  Release announcing certain unaudited financial
     results of the Company for the year ended December 31, 1997.

     Current  Report on Form  8-K dated  March 5, 1998, with  respect to the
     authorization for issuance of  $200 million aggregate  principal amount
     of the Company's 6.20% Senior Notes due March 15, 2003.

     Current Report on  Form 8-K dated April 29,  1998, with respect to  the
     issuance of an Earnings  Release announcing certain unaudited financial
     results of the Company for the quarter ended March 31, 1998.
<PAGE>
<PAGE> 17

                                 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:  May 14, 1998               By /s/ Robert A. Cole                    
                                         Robert A. Cole                 
                                     Senior Vice President and Chief
                                       Financial Officer                 
                                     (Duly Authorized Officer and Principal
                                       Financial Officer)               
<PAGE>
<PAGE> 18

                               Exhibit Index



      Exhibits                                                      Page

(12)  Computation of Ratio of Earnings to Fixed Charges.             19

(27)  Financial Data Schedule.                                       20
<PAGE>