<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, 1997            

                                     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,  1997, 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      Nine Months Ended
                                September 30,           September 30,    
                               1997       1996        1997        1996   
                                       (dollars in thousands)
<S>                          <C>        <C>        <C>         <C>
Revenues
  Finance charges            $307,212   $350,484   $  926,350  $1,065,721
  Insurance                    46,436     51,677      140,705     154,950
  Other                        24,362     20,594       67,691      64,980

Total revenues                378,010    422,755    1,134,746   1,285,651

Expenses
  Interest expense            114,782    116,034      334,908     360,852
  Operating expenses          116,644    119,357      345,602     373,711
  Provision for finance 
    receivable losses          54,427     88,940      182,369     295,683
  Loss on sale of non-  
    strategic assets             -          -          42,225        -   
  Insurance losses and loss
    adjustment expenses        23,500     25,787       69,252      80,841

Total expenses                309,353    350,118      974,356   1,111,087

Income before provision for
  income taxes                 68,657     72,637      160,390     174,564

Provision for Income Taxes     25,146     26,068       58,922      63,755


Net Income                   $ 43,511   $ 46,569   $  101,468  $  110,809


<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>
                                             September 30, December 31,
                                                1997            1996
                                               (dollars in thousands)
<S>                                          <C>             <C>
Assets
  
Finance receivables, net of unearned
  finance charges:
    Real estate loans                        $3,761,182      $3,652,106
    Non-real estate loans                     2,409,302       2,459,660
    Retail sales contracts                      922,621         954,975
    Private label                               253,028         376,580

Net finance receivables                       7,346,133       7,443,321
Allowance for finance receivable
  losses                                       (370,627)       (385,272)
Net finance receivables, less allowance
  for finance receivable losses               6,975,506       7,058,049

Investment securities                           911,381         879,133
Cash and cash equivalents                        89,296          90,197
Notes receivable from parent                    180,013         173,235
Goodwill                                        256,613         263,171
Assets held for sale                               -            668,707
Other assets                                    356,694         370,097

Total assets                                 $8,769,503      $9,502,589


Liabilities and Shareholder's Equity

Long-term debt                               $4,105,946      $4,416,637
Commercial paper                              2,583,662       3,015,920
Insurance claims and policyholder
  liabilities                                   430,963         456,430
Other liabilities                               306,814         263,154
Accrued taxes                                    19,124          15,525

Total liabilities                             7,446,509       8,167,666

Shareholder's equity:
  Common stock                                    5,080           5,080
  Additional paid-in capital                    707,914         691,914
  Net unrealized gains on investment 
    securities                                   29,194          21,454 
  Retained earnings                             580,806         616,475

Total shareholder's equity                    1,322,994       1,334,923

Total liabilities and shareholder's equity   $8,769,503      $9,502,589
<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>
                                                       Nine Months Ended
                                                         September 30,    
                                                      1997          1996  
                                                    (dollars in thousands)
<S>                                                 <C>           <C>
Cash Flows from Operating Activities
Net income                                          $101,468      $110,809
Reconciling adjustments to net cash
  provided by operating activities:
    Provision for finance receivable losses          182,369       295,683
    Depreciation and amortization                     55,690        64,836
    Deferral of finance receivable  
      origination costs                              (28,112)      (37,319)
    Deferred federal income tax charge                56,103         8,504
    Change in other assets and other liabilities     (59,564)          579
    Change in insurance claims and
      policyholder liabilities                       (25,467)      (20,585)
    Loss on sale of non-strategic assets              42,225          -
    Operations related to assets held for sale        39,905          -  
    Other, net                                        10,888        58,362
Net cash provided by operating activities            375,505       480,869

Cash Flows from Investing Activities
  Finance receivables originated or purchased     (3,298,867)   (3,791,596)
  Principal collections on finance receivables     3,129,515     3,645,271
  Net collections on assets held for sale             61,266          -
  Securitized finance receivables purchased         (100,000)         -  
  Sale of non-strategic assets                       732,504          -
  Investment securities purchased                    (99,569)     (149,221)
  Investment securities called, matured and sold      81,899       138,914
  Change in notes receivable from parent
    and affiliates                                    (6,778)       11,720 
  Purchase of assets from affiliate                   (9,536)         -
  Other, net                                            (697)      (37,839)
Net cash provided by (used for)    
  investing activities                               489,737      (182,751)

Cash Flows from Financing Activities
  Proceeds from issuance of long-term debt           481,751        27,950
  Repayment of long-term debt                       (794,500)     (419,560)
  Change in short-term notes payable                (432,258)      221,313 
  Capital contribution from parent                    16,000          -
  Dividends paid                                    (137,136)     (114,554)
Net cash used for financing activities              (866,143)     (284,851)

(Decrease) increase in cash and cash equivalents        (901)       13,267 
Cash and cash equivalents at beginning of period      90,197        88,297

Cash and cash equivalents at end of period          $ 89,296      $101,564

Supplemental Disclosure of Cash Flow Information
  Income taxes paid                                 $ 24,148      $ 19,155
  Interest paid                                     $369,064      $359,873
<FN>
<F1>
See Notes to Condensed Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>
<PAGE> 5

           AMERICAN GENERAL FINANCE CORPORATION AND SUBSIDIARIES
            Notes to Condensed Consolidated Financial Statements
                             September 30, 1997



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 September  30, 1997  and December  31, 1996,  its consolidated
results of operations  for the three months and nine months ended September
30, 1997  and 1996, and  its consolidated  cash flows for  the nine  months
ended  September 30, 1997 and 1996.  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, 1996.  

During  third  quarter  1997,  certain  real  estate secured  loans  having
advances  of  less than  $10 thousand  and  high loan-to-value  ratios were
reclassified from real estate  to non-real estate loans (effective  January
1,  1997).   From a  servicing and collection  standpoint, these  loans are
administered  more  like non-real  estate  secured loans  than  real estate
secured  loans.   This  reclassification affected  $163.9 million  loans at
September 30, 1997.


Note 3.  Accounting Changes

In  June  1997,  the Financial  Accounting  Standards  Board  (FASB) issued
Statement  of  Financial   Accounting  Standards  (SFAS)  130,   "Reporting
Comprehensive  Income"   which  establishes  standards  for  reporting  and
displaying  comprehensive  income  and  its  components  in  the  financial
statements.  This  statement is  effective for interim  and annual  periods
beginning  after   December  15,  1997.     Reclassification  of  financial
statements  for  all periods  presented  will  be required  upon  adoption.
Application of this  statement will not  change recognition  or measurement
of net income and, therefore, will  not impact  the  Company's consolidated
results of operations or financial position.
<PAGE>
<PAGE> 6

In June 1997, the FASB  also 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 segment
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.  AGFC uses  interest conversion agreements to reduce its
exposure to  future fluctuations in  interest expense rates  by effectively
converting short-term and certain long-term floating-rate debt  to a fixed-
rate  basis.    At  September  30,  1997,  outstanding  interest conversion
agreements in which  AGFC contracted  to pay  interest at  fixed rates  and
receive floating rates totaled  $740.0 million of notional amount,  with an
average fixed pay  rate of 7.72%  and an average  floating receive rate  of
5.66%.   AGFC's  use  of  interest conversion  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 1997 or 1996.


Note 5.  Sale of Non-strategic Assets

During fourth  quarter 1996, the Company  decided to offer for  sale $874.8
million  of non-strategic,  underperforming credit  card and  private label
finance receivable portfolios.  These assets held for sale  were carried at
net realizable value, after considering related expenses.

In April 1997, the  Company repurchased $100.0 million of private label and
credit   card   receivables  that   previously   had   been  sold   through
securitization.   No gain  or loss resulted  from this  transaction.  These
repurchased  credit card receivables were  offered for sale  along with the
Company's  other  credit card  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 an  aftertax loss of $27.0  million 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.
<PAGE>
<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, and borrowings under credit facilities.  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 $375.5  million for the  nine months  ended
September 30, 1997 compared to $480.9  million for the same period in 1996.
Operating  cash  flow combined  with the  proceeds  from the  sale  of non-
strategic  assets, the  net  collections on  assets held  for  sale, and  a
capital contribution from AGFI generated cash flow of  $1.2 billion for the
nine months ended  September 30, 1997  compared to $480.9  million for  the
same period in  1996.  These cash  flows were used principally  to fund the
net repayments  of debt for  the nine months  ended September 30,  1997 and
1996 of $745.0 million  and $170.3 million, respectively, to  pay dividends
to AGFI of $137.1 million and $114.6  million, respectively, to finance the
net originations and purchases of finance receivables of $169.4 million and
$146.3  million,   respectively,  and  to  repurchase   $100.0  million  of
securitized finance receivables during second quarter 1997.  

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 September 30, 1997 was 6.45 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.  

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  September 30,  1997,  the  Company's  capital totaled  $8.0
billion, consisting  of $6.7  billion of debt  and $1.3 billion  of equity,
compared to $8.5 billion at September  30, 1996, 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 funds  primarily through
underwritten public  debt offerings with maturities  generally ranging from
three to ten years. 
<PAGE>
<PAGE> 8

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 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

The  Company  maintains  credit  facilities  to  support  the  issuance  of
commercial paper and to provide an additional source of funds for operating
requirements.  At September 30, 1997,  the Company was an eligible borrower
under  $3.6  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 September
30,  1997,  the  Company also  had  $191.0  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
outstanding  borrowings.  At September  30, 1997, there  were no borrowings
under any credit facilities.

Securitization

On April 1, 1997, the Company repurchased all $100.0 million of the private
label and credit  card 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

Management  has  been  engaged  in a  company-wide  program  to render  its
computer  systems  (hardware  and  mainframe   and  personal   applications
software) year 2000 compliant.  The Company will continue to incur internal
staff costs as well as third-party vendor and other expenses to prepare the
systems  for year  2000.  The cost  of testing  and conversion  of  systems
applications has not had, and is not expected to have,  a material  adverse
effect on the Company's  consolidated  results  of operations  or financial
condition.  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 problem could have
a material adverse impact on the operations of the Company.
<PAGE>
<PAGE> 9

                       SELECTED FINANCIAL INFORMATION


The following  table shows  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,    
                             1997            1996     1997            1996 
                                        (dollars in thousands)
Average finance receivables, 
  net of unearned finance
  charges (average net
  receivables)              $7,266,025  $7,851,785   $7,300,959  $7,897,039

Average borrowings          $6,616,365  $6,878,614   $7,001,072  $6,951,355

Yield - finance charges
  (annualized) as a
  percentage of average
  net receivables               16.82%      17.79%       16.95%      18.01%

Borrowing cost - interest
  expense (annualized) as 
  a percentage of average
  borrowings                     6.93%       6.89%        6.83%       6.92%

Interest spread - yield
  less borrowing cost            9.89%      10.90%       10.12%      11.09%

Insurance revenues
  (annualized) as a
  percentage of average
  net receivables                2.56%       2.63%        2.57%       2.62%

Operating expenses
  (annualized) as a
  percentage of average
  net receivables                6.42%       6.08%        6.31%       6.31%

Return on average assets 
  (annualized)                   2.00%       2.05%        1.48%       1.61%

Return on average equity
  (annualized)                  13.23%      13.02%       10.02%      10.27%

Charge-off ratio -
  net charge-offs
  (annualized) as a
  percentage of average
  net receivables                3.28%       5.42%        3.61%       5.44%

Allowance ratio - 
  allowance for finance
  receivable losses as a
  percentage of net
  finance receivables              -           -          5.05%       5.68%
<PAGE>
<PAGE> 10

Selected Financial Information (Continued)


                                                       At or for the
                                                     Nine Months Ended
                                                       September 30,  
                                                     1997        1996 

Ratio of earnings to fixed charges (refer to
  Exhibit 12 for calculations)                       1.44        1.47

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)                              3.85%       4.29%

Debt to tangible equity ratio - debt to
  equity less goodwill and net unrealized
  gains or losses on fixed-maturity
  investment securities                              6.45        6.22

Debt to equity ratio                                 5.06        5.00



                       ANALYSIS OF OPERATING RESULTS

Net Income

Net income  decreased $3.1  million,  or 7%,  for  the three  months  ended
September  30, 1997  and $9.3  million, or  8%, for  the nine  months ended
September 30,  1997 when compared to the same periods in 1996 primarily due
to  decreases  in finance  charges, partially  offset  by decreases  in the
provision for  finance receivable losses, operating  expenses, and interest
expense.   The decrease in net  income for the nine  months ended September
30, 1997 also reflected the loss on the sale of non-strategic assets during
second quarter 1997.

Net  income has fluctuated over  the past two  years due to  the decline in
credit quality of the  Company's finance receivables beginning in  1995 and
management's related  actions  to address  credit quality.   The  Company's
strategy in prior years of emphasizing higher-yielding finance receivables,
which are  characterized by higher  credit risk, resulted  in delinquencies
and net charge-offs increasing to  higher than anticipated levels beginning
in the third quarter of 1995.   Due to these increases in delinquencies and
net charge-offs, management initiated a comprehensive review of the Company
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  for finance receivable
losses.  Accordingly, the Company recorded a $216.0 million increase in the
allowance for finance receivable losses in fourth quarter 1995.  
<PAGE>
<PAGE> 11

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 included
slowing growth, de-emphasizing some higher risk portfolios, and  increasing
the proportion of real estate secured receivables.

To increase its focus on core operations, the Company decided in the fourth
quarter  of 1996  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  an  associated
allowance for finance receivable losses of $70.0 million 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, the  Company determined that an aftertax charge  to
operations of $88.1 million was necessary to reduce the carrying  amount of
the assets held for sale to net realizable value.  This charge was recorded
in fourth quarter 1996. 

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
took an  aftertax charge  of $27.0  million in second  quarter 1997.   This
additional 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.

Net  finance  receivables totaled  $7.3 billion  at  September 30,  1997, a
decrease of  $675.3 million  from September 30,  1996 primarily due  to the
aforementioned reclassification and sale of credit card and certain private
label  receivables  and  the  substantial  liquidation  of  underperforming
receivables,  partially offset by purchases of  real estate loan portfolios
during  fourth quarter 1996  and real estate  loan growth during  1997.  At
September  30, 1997, real estate  secured finance receivables accounted for
51% of total net finance receivables compared to 42% at September 30, 1996.

Results of the action program  to improve credit quality became evident  in
the first nine  months of 1997.  Although yield  decreased 106 basis points
for the  nine months ended  September 30,  1997 when compared  to the  same
period in 1996,  this was offset  by a 183  basis point improvement  in the
charge-off  ratio.   The  delinquency  ratio  also  improved  to  3.85%  at
September 30, 1997 from 4.29% a year earlier.

Factors which specifically affected the  Company's operating results are as
follows:

Finance Charges

Finance  charge revenues  decreased $43.3  million, or  12%, for  the three
months ended  September 30, 1997 and  $139.4 million, or 13%,  for the nine
months  ended September 30, 1997 when compared  to the same periods in 1996
primarily due to decreases  in average net receivables and yield.   Average
net receivables decreased $585.8 million, or 7%, for the three months ended
September 30, 1997  and $596.1 million,  or 8%, for  the nine months  ended
September 30, 1997 when compared to  the same periods in 1996 primarily due
<PAGE>
<PAGE> 12

to  the action  program for  improving credit  quality, which  included the
aforementioned reclassification  and sales  of certain  finance receivables
and the  substantial  liquidation  of  underperforming  receivables.    The
exclusion of  finance charges related to  the assets held for  sale for the
nine  months ended  September  30,  1997  totaled  $75.0  million.    Yield
decreased 97 basis points for the three months ended September 30, 1997 and
106 basis points for the nine months ended September 30, 1997 when compared
to  the same  periods  in 1996  primarily  due to  the  action program  for
improving credit quality,  including increasing the  proportion of  finance
receivables that are real estate loans (which generally have lower yields),
partially offset  by the  decreased  proportion of  non-accrual  delinquent
finance receivables during 1997. 

Insurance Revenues

Insurance revenues decreased  $5.2 million,  or 10%, for  the three  months
ended September  30, 1997 and  $14.2 million,  or 9%, for  the nine  months
ended  September 30,  1997  when  compared  to the  same  periods  in  1996
primarily due to decreases  in earned premiums.  Earned  premiums decreased
primarily  due to  the decline  in related  loan volume resulting  from the
action program for improving credit quality.

Other Revenues

Other  revenues increased $3.8 million, or 18%,  for the three months ended
September  30, 1997  and $2.7  million, or  4%, for  the nine  months ended
September 30, 1997 when compared to the same periods in 1996.  The increase
in  other  revenues for  the  three months  ended  September  30, 1997  was
primarily due to an  increase in interest revenue on  notes receivable from
parent.  The increase in other revenues for the nine months ended September
30, 1997 was primarily due to  an increase in investment revenue, partially
offset by a decrease  in interest revenue on notes receivable  from parent.
Investment revenue increased for  the nine months ended September  30, 1997
primarily  due to  growth  in average  invested  assets for  the  insurance
operations of $40.2  million, partially  offset by a  decrease in  adjusted
portfolio yield of 7 basis points.

Interest Expense

Interest expense decreased  $1.3 million, or 1%, for the three months ended
September 30,  1997 and  $25.9 million,  or 7%, for  the nine  months ended
September 30, 1997 when compared to the same periods in 1996.  The decrease
in  interest expense  for  the three  months ended  September 30,  1997 was
primarily  due  to  a decrease  in  average borrowings.    The  decrease in
interest expense  for the nine months  ended September 30, 1997  was due to
the  exclusion of  interest expense  related to  the assets  held  for sale
totaling  $23.2 million  and to  the decline  in borrowing  cost, partially
offset  by an increase  in average borrowings.   Borrowing cost decreased 9
basis points for the nine months ended September 30, 1997  when compared to
the same period in  1996 due to lower short-term  borrowing cost, partially
offset  by higher long-term  borrowing cost.   Average borrowings decreased
$262.2 million,  or 4%, for the  three months ended September  30, 1997 and
increased $49.7 million,  or 1%, for  the nine  months ended September  30,
1997 when compared  to the same periods  in 1996.  The  decrease in average
borrowings for the three months ended September 30, 1997 was primarily  due
to the  aforementioned sales of  certain finance receivables  during second
quarter  1997, partially offset by purchases of real estate loan portfolios
<PAGE>
<PAGE> 13

that occurred in fourth quarter 1996 and growth in real estate loans during
1997.   The  increase in  average  borrowings  for the  nine  months  ended
September 30,  1997 was primarily to fund the purchases of real estate loan
portfolios that occurred in  fourth quarter 1996 and growth  in real estate
loans  during 1997, partially offset by the aforementioned sales of certain
finance receivables during second quarter 1997.

Operating Expenses

Operating  expenses decreased  $2.7 million,  or 2%,  for the  three months
ended  September 30,  1997 and $28.1  million, or  8%, for  the nine months
ended September  30, 1997 when compared to the same  periods in 1996 due to
(1)  the exclusion  of expenses  to service  the non-strategic  assets sold
during  second  quarter  1997  totaling  $3.8 million  and  $18.2  million,
respectively (the  Company continued  to  service the  receivables  through
September  1997); (2) certain  non-recurring operating  expenses associated
with  discontinued  initiatives  that  negatively  impacted  the  financial
results  for 1996 by $1.2  million and $8.5  million, respectively; and (3)
the  action program  to improve  credit quality  and reduce expenses.   The
action  program   implemented  in  fourth  quarter   1995  (which  included
emphasizing real estate loan  growth) contributed to a workforce  reduction
of approximately  900 positions and  a net  decrease of  57 branch  offices
since September 30, 1996.  

Provision for Finance Receivable Losses

Provision  for finance receivable  losses decreased $34.5  million, or 39%,
for  the three months ended September 30,  1997 and $113.3 million, or 38%,
for the  nine months  ended September  30, 1997 when  compared to  the same
periods in 1996 primarily due to  the decreases in net charge-offs totaling
$46.5  million  and $125.4  million,  respectively.   These  decreases were
primarily  due to  reductions  in charge-off  levels  for the  core  branch
network.    The  decrease in  net  charge-offs for  the  nine  months ended
September  30, 1997 also reflected the exclusion of net charge-offs related
to the assets held for sale totaling $58.6 million.
   
Net  charge-offs  from  finance  receivables  for  the  three  months ended
September 30,  1997 decreased to $59.4 million  from $105.9 million for the
same period in 1996.  Net  charge-offs for the three months ended  June 30,
1997  were $67.1 million.  The charge-off  ratio for third quarter 1997 was
3.28% compared to 3.70% for second quarter 1997 and 5.42% for third quarter
1996.  Excluding  the portfolios held  for sale,  the charge-off ratio  was
4.58% for third quarter 1996.
 
At September 30, 1997, delinquencies were $305.9 million compared to $372.1
million at September  30, 1996 and $293.5  million at June  30, 1997.   The
delinquency ratio at September 30, 1997 was 3.85% compared to 3.74% at June
30, 1997  and 4.29% at September 30, 1996.  The increase in the delinquency
ratio from June  30, 1997 reflected an  increase in such ratio  in the loan
portfolio.  Excluding the  portfolios held for sale, the  delinquency ratio
at September 30, 1996 was 3.93%.

During third  quarter 1997,  management reduced  the allowance  for finance
receivable losses by $5.0 million  from the balance at June 30,  1997 based
on the favorable credit quality trends of the finance receivable portfolio.
The allowance  for finance receivable  losses decreased $84.6  million from
$455.3  million at September 30, 1996 due  to the reclassification of $70.0
<PAGE>
<PAGE> 14

million of allowance for finance receivable  losses to assets held for sale
and reductions in the allowance for finance receivable  losses based on the
results of the action  program for improving credit quality,  including the
increased  proportion of  real  estate  loans.    The  allowance  ratio  at
September 30, 1997 was  5.05% compared to 5.20% at June  30, 1997 and 5.68%
at September  30, 1996.  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.

Loss on Sale of Non-strategic Assets

Loss on sale of  non-strategic assets totaled $42.2 million  ($27.0 million
aftertax) for the nine months ended  September 30, 1997 due to the  sale of
non-strategic, underperforming receivables during second quarter 1997.  See
Analysis of Operating Results - Net Income for  further information on loss
on sale of non-strategic assets.

Insurance Losses and Loss Adjustment Expenses

Insurance losses  and loss adjustment  expenses decreased $2.3  million, or
9%, for the  three months ended  September 30, 1997  and $11.6 million,  or
14%, for the nine months ended September 30, 1997 when compared to the same
periods in  1996 due to decreases  in provision for future  benefits and in
claims paid.  Provision for future benefits decreased $1.3 million and $5.3
million,  respectively,  due  to  reduced  sales  of  non-credit  insurance
products.   Claims decreased  $1.0 million and  $6.3 million, respectively,
primarily  due to decreased business.  The  decrease in claims for the nine
months  ended September 30, 1997  also reflected  favorable loss experience
on credit insurance.  

Provision for Income Taxes

The provision for income taxes decreased  $.9 million, or 4%, for the three
months  ended September  30, 1997  and $4.8  million, or  8%, for  the nine
months  ended September 30, 1997 when compared  to the same periods in 1996
primarily due to lower 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.   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  failure to  achieve  the Company's  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> 15

                        PART II - OTHER INFORMATION


Item 1.  Legal Proceedings.

In addition to  those lawsuits  or proceedings disclosed  in the  Company's
1996 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  July 30, 1997,  with respect to  the
     issuance of an Earnings Release announcing certain unaudited financial
     results of the Company for the quarter ended June 30, 1997.

     Current Report on Form 8-K dated August 5,  1997, with respect  to the
     establishment of a program  providing for  the issuance  from time  to
     time of up to $1.0 billion aggregate principal amount of the Company's
     Medium-Term Notes, Series E.

     Current Report on Form 8-K  dated September 17,  1997, with respect to
     the authorization for  issuance  of  $200 million  aggregate principal
     amount of the Company's 6 1/8% Senior Notes due September 15, 2000.

     Current Report on Form 8-K dated October 22, 1997, with respect to the
     issuance of an Earnings Release announcing certain unaudited financial
     results of the Company for the quarter ended September 30, 1997.
<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, 1997          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>