<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 1-7422


                       AMERICAN GENERAL FINANCE, INC.
           (Exact name of registrant as specified in its charter)



                Indiana                              35-1313922         
       (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 2,000,000  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, INC. 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                            $326,752      $319,799
  Insurance                                    42,961        47,529
  Other                                        18,952        17,420

Total revenues                                388,665       384,748

Expenses
  Interest expense                            121,702       112,831
  Operating expenses                          124,792       118,669
  Provision for finance
    receivable losses                          49,005        67,547
  Insurance losses and loss
    adjustment expenses                        22,037        24,004

Total expenses                                317,536       323,051

Income before provision for
  income taxes                                 71,129        61,697

Provision for Income Taxes                     26,907        22,903


Net Income                                   $ 44,222      $ 38,794


<FN>
<F1>
See Notes to Condensed Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>
<PAGE> 3
<TABLE>
              AMERICAN GENERAL FINANCE, INC. 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                        $4,300,458      $4,155,167
    Non-real estate loans                     2,476,363       2,554,888
    Retail sales finance                      1,285,561       1,301,133

Net finance receivables                       8,062,382       8,011,188
Allowance for finance receivable
  losses                                       (367,653)       (372,653)
Net finance receivables, less allowance
  for finance receivable losses               7,694,729       7,638,535

Investment securities                           954,663         929,311
Cash and cash equivalents                       113,364         105,695
Other assets                                    653,461         615,959

Total assets                                 $9,416,217      $9,289,500


Liabilities and Shareholder's Equity

Long-term debt                               $4,069,474      $4,011,457
Short-term notes payable:
  Commercial paper                            3,201,532       3,157,671
  Banks and other                                92,650          95,000
Investment certificates                           2,241           2,574
Insurance claims and policyholder
  liabilities                                   429,144         436,859
Other liabilities                               299,138         300,342
Accrued taxes                                    46,954          22,272

Total liabilities                             8,141,133       8,026,175

Shareholder's equity:
  Common stock                                    1,000           1,000
  Additional paid-in capital                    743,083         743,083
  Accumulated other comprehensive    
    income                                       33,648          34,512 
  Retained earnings                             497,353         484,730

Total shareholder's equity                    1,275,084       1,263,325

Total liabilities and shareholder's equity   $9,416,217      $9,289,500
<FN>
<F1>
See Notes to Condensed Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>
<PAGE> 4
<TABLE>
              AMERICAN GENERAL FINANCE, INC. 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                                          $ 44,222      $ 38,794
Reconciling adjustments to net cash
  provided by operating activities:
    Provision for finance receivable losses           49,005        67,547
    Depreciation and amortization                     22,963        21,374
    Deferral of finance receivable  
      origination costs                              (10,500)       (9,896)
    Deferred federal income tax (benefit) charge      (1,093)        1,913 
    Change in other assets and other liabilities      (7,036)       14,379
    Change in insurance claims and
      policyholder liabilities                        (7,715)      (16,883)
    Change in taxes receivable and payable            48,755        23,144 
    Operations related to assets held for sale           -          20,108 
    Other, net                                         1,369         9,533 
Net cash provided by operating activities            139,970       170,013

Cash Flows from Investing Activities
  Finance receivables originated or purchased     (1,273,511)   (1,016,540)
  Principal collections on finance receivables     1,146,970     1,081,779
  Net collections on assets held for sale                -          35,337
  Advances for purchases of finance receivables      (22,240)         (855)
  Investment securities purchased                    (65,710)      (43,313)
  Investment securities called, matured and sold      41,406        37,858
  Other, net                                         (26,039)       (2,736)
Net cash (used for) provided by
  investing activities                              (199,124)       91,530 

Cash Flows from Financing Activities
  Proceeds from issuance of long-term debt           536,270         1,608
  Repayment of long-term debt                       (479,026)     (207,767)
  Change in investment certificates                     (333)         (387)
  Change in short-term notes payable                  41,511       (93,215)
  Capital contribution from parent                       -          40,000
  Dividends paid                                     (31,599)          -   
Net cash provided by (used for) 
  financing activities                                66,823      (259,761)

Increase in cash and cash equivalents                  7,669         1,782 
Cash and cash equivalents at beginning of period     105,695       105,493

Cash and cash equivalents at end of period          $113,364      $107,275


Supplemental Disclosure of Cash Flow Information
  Income taxes received                             $(20,397)     $ (3,952)
  Interest paid                                     $138,686      $129,748
<FN>
<F1>
See Notes to Condensed Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>
<PAGE> 5
<TABLE>
              AMERICAN GENERAL FINANCE, INC. 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                                           $44,222        $38,794

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                                 $43,358        $25,960


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

              AMERICAN GENERAL FINANCE, INC. 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,
Inc. and its subsidiaries.  American General Finance, Inc. will be referred
to  as "AGFI" 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  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

The Company's principal  borrowing subsidiary is  American General  Finance
Corporation  (AGFC), a wholly-owned subsidiary of AGFI.  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  $145.5  million ($93.5  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 $140.0  million for the  three months ended
March 31, 1998 compared to $170.0 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 $238.4 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 $126.5 million and to pay  dividends to American  General of
$31.6  million.  Operating cash  flow combined with the net collections  of
finance receivables and assets held  for sale and a capital contribution of
$40.0 million from American  General generated cash flow of $310.6  million
for  the  three  months ended  March  31, 1997.   This  cash flow  was used
principally to fund the net repayments of debt of $299.8 million.  

Dividends have  been paid to manage  the Company's leverage to  a target of
7.5  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  7.50 to 1.   AGFI's
ability  to  pay dividends  is substantially  dependent  on the  receipt of
dividends  or other funds from  its subsidiaries, primarily  AGFC.  Certain
AGFI  and  AGFC  financing  agreements  effectively  limit  the  amount  of
<PAGE>
<PAGE> 9

dividends the entity  may pay;  however, management does  not expect  those
limits to affect the Company's ability to maintain 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 both March 31,  1998 and 1997, the  Company's capital totaled
$8.6  billion, consisting  of  $7.3 billion  of debt  and  $1.3 billion  of
equity.

The Company issues a combination of fixed-rate debt, principally long-term,
and floating-rate debt,  principally short-term.   The Company's  principal
borrowing subsidiary, 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 $318.5 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, Company  borrowings  outstanding  under
uncommitted  credit facilities  totaled $90.0  million,  and there  were no
borrowings under any committed 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)                        $8,002,228    $7,549,511

Average borrowings                                 $7,277,756    $7,508,575

Yield - finance charges (annualized)
  as a percentage of average net 
  receivables                                          16.48%        17.09%

Borrowing cost - interest expense
  (annualized) as a percentage of
  average borrowings                                    6.71%         6.71%

Interest spread - yield less 
  borrowing cost                                        9.77%        10.38%

Insurance revenues (annualized) as
  a percentage of average net 
  receivables                                           2.15%         2.52%

Operating expenses (annualized) as
  a percentage of average net 
  receivables                                           6.24%         6.29%

Return on average assets 
  (annualized)                                          1.89%         1.64%

Return on average equity
  (annualized)                                         13.81%        12.71%

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                       2.70%         3.83%

Allowance ratio - allowance for 
  finance receivable losses as a
  percentage of net finance 
  receivables                                           4.56%         5.23%

Ratio of earnings to fixed charges
  (refer to Exhibit 12 for 
  calculations)                                         1.57          1.48
<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                     3.49%       3.76%

Debt to tangible equity ratio - debt to
  equity less goodwill and net unrealized
  gains or losses on fixed-maturity
  investment securities                                 7.50        7.41

Debt to equity ratio                                    5.78        5.79


                       ANALYSIS OF OPERATING RESULTS

Net Income

Net income increased $5.4 million, or 14%, 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 61  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  113 basis  point improvement  in the  charge-off ratio.   The
delinquency ratio  also improved to 3.49%  at March 31, 1998  from 3.76% 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 $7.0 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 $452.7 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 61  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  $1.5 million, or  9%, for the three  months ended
March 31, 1998 when compared to the same period in 1997 primarily due to an
increase in investment revenue,  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 $8.9 million, or 8%, 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 6.71%  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  $6.1 million,  or 5%,  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,  and data  processing
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 34 branch offices. 


Provision for Finance Receivable Losses

Provision for finance  receivable losses decreased  $18.5 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
$54.0 million from $72.5 million for the same  period in 1997.  Net charge-
offs for the three months ended December 31, 1997 were $68.9 million.   The
charge-off ratio for  first quarter 1998  was 2.70%  compared to 3.64%  for
fourth quarter 1997 and 3.83% for first quarter 1997.     

At March 31,  1998, delinquencies  were $303.3 million  compared to  $309.7
million  at December 31,  1997 and $304.2  million at March  31, 1997.  The
delinquency ratio at March 31, 1998 was 3.49% compared to 3.60% at December
31, 1997 and 3.76% at March 31, 1997. 
 
The  allowance for  finance receivable losses  decreased to  $367.7 million
from $390.2  million at March 31, 1997.   The allowance ratio  at March 31,
1998 was 4.56%  compared to 4.65% 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.  
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<PAGE> 15

Provision for Income Taxes

The  provision for income  taxes increased  $4.0 million,  or 17%,  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.
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<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, AGFI 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.

     No Current Reports on  Form 8-K were filed during the first quarter  of
     1998.
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<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, INC.           
                                           (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)               
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<PAGE> 18

                               Exhibit Index



      Exhibits                                                      Page

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

(27)  Financial Data Schedule.                                       20
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