<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, 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  November 12,  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      Nine Months Ended
                                  September 30,          September 30,    
                                 1998       1997        1998        1997   
                                         (dollars in thousands)
<S>                            <C>        <C>         <C>         <C>
Revenues
  Finance charges              $335,829   $307,212    $  978,799  $  926,350
  Insurance                      44,290     46,436       131,630     140,705
  Other                          23,748     24,362        72,366      67,691

Total revenues                  403,867    378,010     1,182,795   1,134,746

Expenses
  Interest expense              127,812    114,782       368,883     334,908
  Operating expenses            127,060    116,644       373,955     345,602
  Provision for finance
    receivable losses            51,575     54,427       149,316     182,369
  Loss on sale of non- 
    strategic assets               -          -             -         42,225
  Insurance losses and loss
    adjustment expenses          20,736     23,500        64,504      69,252

Total expenses                  327,183    309,353       956,658     974,356

Income before provision for
  income taxes                   76,684     68,657       226,137     160,390

Provision for Income Taxes       27,380     25,146        83,710      58,922


Net Income                     $ 49,304   $ 43,511    $  142,427  $  101,468


<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,
                                               1998             1997   
                                               (dollars in thousands) 
<S>                                         <C>              <C>
Assets

Finance receivables, net of unearned
  finance charges:
    Real estate loans                       $ 4,861,941      $4,067,500
    Non-real estate loans                     2,490,827       2,502,051
    Retail sales finance                      1,271,348       1,257,485

Net finance receivables                       8,624,116       7,827,036
Allowance for finance receivable
  losses                                       (355,626)       (363,126)
Net finance receivables, less allowance
  for finance receivable losses               8,268,490       7,463,910

Investment securities                           992,832         928,411
Cash and cash equivalents                       109,335          91,076
Notes receivable from parent                    159,181         185,028
Other assets                                    636,011         572,180

Total assets                                $10,165,849      $9,240,605


Liabilities and Shareholder's Equity

Long-term debt                              $ 4,269,786      $3,941,486
Short-term notes payable:
  Commercial paper                            3,614,517       3,157,671
  Banks and other                                 1,500            -  
Insurance claims and policyholder
  liabilities                                   433,904         436,859
Other liabilities                               308,367         308,601
Accrued taxes                                    28,327          21,073

Total liabilities                             8,656,401       7,865,690

Shareholder's equity:
  Common stock                                    5,080           5,080
  Additional paid-in capital                    740,914         718,914
  Accumulated other comprehensive    
    income                                       47,494          34,512 
  Retained earnings                             715,960         616,409

Total shareholder's equity                    1,509,448       1,374,915

Total liabilities and shareholder's equity  $10,165,849      $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>
                                                         Nine Months Ended
                                                           September 30,    
                                                         1998         1997 
                                                       (dollars in thousands)
<S>                                                   <C>           <C>
Cash Flows from Operating Activities
Net income                                            $  142,427    $  101,468
Reconciling adjustments:
  Provision for finance receivable losses                149,316       182,369
  Depreciation and amortization                           73,680        55,690
  Deferral of finance receivable origination costs       (32,695)      (28,112)
  Deferred income tax charge                               8,836        56,103
  Change in other assets and other liabilities           (10,905)       10,656 
  Change in insurance claims and 
    policyholder liabilities                              (2,955)      (25,467)
  Change in taxes receivable and payable                  33,257       (17,464)
  Loss on sale of non-strategic assets                      -           42,225
  Operations related to assets held for sale                -           39,905
  Other, net                                             (15,171)        6,185
Net cash provided by operating activities                345,790       423,558

Cash Flows from Investing Activities
  Finance receivables originated or purchased         (4,410,602)   (3,298,867)
  Principal collections on finance receivables         3,475,112     3,129,515
  Net collections on assets held for sale                   -           61,266
  Securitized finance receivables purchased                 -         (100,000)
  Advances for purchases of finance receivables          (16,020)      (48,053)
  Sale of non-strategic assets                              -          732,504
  Investment securities purchased                       (168,674)      (99,569)
  Investment securities called, matured and sold         130,386        81,899
  Change in notes receivable from parent
    and affiliates                                        25,847        (6,778)
  Purchase and transfer of assets from affiliates        (18,844)       (9,536)
  Change in premiums on finance receivables
    purchased and deferred charges                       (95,733)       (4,072)
  Other, net                                             (12,929)        3,375 
Net cash (used for) provided by investing activities  (1,091,457)      441,684

Cash Flows from Financing Activities
  Proceeds from issuance of long-term debt             1,128,506       481,751
  Repayment of long-term debt                           (802,050)     (794,500)
  Change in short-term notes payable                     458,346      (432,258)
  Capital contribution from parent                        22,000        16,000
  Dividends paid                                         (42,876)     (137,136)
Net cash provided by (used for) financing activities     763,926      (866,143)

Increase (decrease) in cash and cash equivalents          18,259          (901)
Cash and cash equivalents at beginning of period          91,076        90,197
Cash and cash equivalents at end of period              $109,335      $ 89,296

Supplemental Disclosure of Cash Flow Information
  Income taxes paid                                     $ 42,883      $ 24,148
  Interest paid                                         $383,958      $369,064
<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      Nine Months Ended
                                  September 30,          September 30,   
                                 1998       1997        1998       1997  
                                         (dollars in thousands)
<S>                             <C>        <C>         <C>       <C>
Net income                      $49,304    $43,511     $142,427  $101,468
                                                                         
Other comprehensive income: 
  Net unrealized gains on 
    investment securities        18,856     14,642       19,676    12,116 
  Income tax effect              (6,600)    (5,125)      (6,887)   (4,241)

  Net unrealized gains on
    investment securities,
    net of tax                   12,256      9,517       12,789     7,875 

  Reclassification adjustment
    for realized gains
    (losses) included in  
    net income                      391        (99)         297      (208)
  Income tax effect                (137)        35         (104)       73
                       
  Realized gains (losses)
    included in net income,
    net of tax                      254        (64)         193      (135)
                           
Other comprehensive income,
  net of tax                     12,510      9,453       12,982     7,740 


Comprehensive income            $61,814    $52,964     $155,409  $109,208


<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
                             September 30, 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 September  30, 1998  and December  31, 1997,  its consolidated
results of operations for the three  months and nine months ended September
30, 1998  and 1997, its consolidated  cash flows for the  nine months ended
September  30, 1998 and 1997, and its consolidated comprehensive income for
the three months and nine  months ended September 30, 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

In  June  1997,  the  Financial Accounting  Standards  Board  (FASB) issued
Statement of Financial Accounting Standards (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.

In  June 1998,  the  FASB  issued  SFAS  133,  "Accounting  for  Derivative
Instruments   and  Hedging  Activities,"   which  requires  all  derivative
instruments to be recognized at fair  value as either assets or liabilities
in the balance sheet.  Changes in the fair value of a derivative instrument
are  reported as earnings or other comprehensive income, depending upon the
intended use of the derivative instrument.  This statement is effective for
<PAGE>
<PAGE> 7

years beginning after June 15, 1999.   Adoption of SFAS 133 is not expected
to  have a  material  impact  on  the  Company's  consolidated  results  of
operations or financial position.

During first  quarter  1998,  the  Company  adopted  SFAS  130,  "Reporting
Comprehensive  Income,"  which  establishes  standards  for  reporting  and
displaying  comprehensive  income  and  its  components  in  the  financial
statements.  The  Company elected  to report comprehensive  income and  its
components  in   the  consolidated  statements   of  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.


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  $965.0 million
in  notional amount at September 30, 1998, with a weighted average interest
rate payable of  7.24% and a weighted  average interest rate  receivable of
5.25%.  

Treasury rate lock  agreements have been 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.   At  September  30, 1998,  there  were no
treasury rate lock agreements in effect.

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 nine months of 1998 or 1997.


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 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, the  sale of
securitized  finance receivables,  and  capital  contributions  from  AGFI.
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 $345.8  million for the  nine months  ended
September 30, 1998 compared to $423.6  million for the same period in 1997.
The decrease in operating cash flow for the nine months ended September 30,
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 and a capital contribution of $22.0
million  from AGFI generated cash flow of  $1.2 billion for the nine months
ended September 30,  1998.  This cash flow was  used principally to finance
the  net  originations  and  purchases  of  finance receivables  of  $951.5
million,  to fund the increase in premiums on finance receivables purchased
and deferred  charges of  $95.7 million,  and to pay  dividends to  AGFI of
$42.9  million.  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  of $16.0 million from AGFI  generated cash flow
of $1.2 billion for  the nine months ended  September 30, 1997.  This  cash
flow  was used  principally to fund  the net  repayments of  debt of $745.0
million,  to  finance  the  net   originations  and  purchases  of  finance
receivables of $217.4 million, to pay dividends to AGFI  of $137.1 million,
and to repurchase $100.0 million of securitized finance receivables.  
<PAGE>
<PAGE> 9

Dividends  are paid (or capital  contributions are received)  to manage the
Company's leverage  to a target  of 6.50 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,
1998 was 6.49  to 1.  Certain  AGFC 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 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,  1998,  the  Company's  capital totaled  $9.4
billion, consisting of  $7.9 billion  of debt and  $1.5 billion of  equity,
compared to $8.0 billion at September  30, 1997, consisting of $6.7 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.   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.  Management determines the Company's mix of fixed-rate and
floating-rate  debt 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 has used
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 September  30, 1998, the Company was an eligible borrower
under $5.0  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,  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
<PAGE>
<PAGE> 10

outstanding  borrowings.  At September  30, 1998, there  were no borrowings
under any credit facilities.


Year 2000

Internal Systems.  The Company is  in the process of modifying its internal
systems to achieve Year 2000  readiness.  The Company has developed  and is
implementing a plan to minimize  the risk of a significant negative  impact
on its operations.  

The  Company's  plan includes  the following  activities:   (1)  perform an
inventory  of  the  Company's  information  technology and  non-information
technology systems; (2) assess which items in  the inventory may expose the
Company to business interruptions due to Year 2000 issues; (3) reprogram or
replace systems  that are not  Year 2000 ready;  (4) test systems  to prove
that they will function into the next century as they do currently; and (5)
return the systems to operations.  As of September 30,  1998, the inventory
and assessment  activities are substantially  complete, and the  Company is
progressing   with  activities  (3)  and  (4).    The  Company  expects  to
substantially  complete the  remaining activities  for critical  systems by
December 31, 1998.  However, activities (3) through (5) for certain systems
will continue in 1999.

Third Party  Relationships.   The Company  has  relationships with  various
third  parties  who must  also be  Year 2000  ready.   These  third parties
provide (or receive) resources and services to  (or from)  the Company  and
include organizations with which the Company exchanges information.   Third
parties include vendors  of hardware, software,  and information  services;
providers of infrastructure  services such as voice and data communications
and utilities for office  facilities; and customers.  Third  parties differ
from internal systems  in that the  Company exercises less, or  no, control
over Year 2000 readiness.   The Company has developed a  plan to assess and
attempt  to mitigate  the risks  associated with  the potential  failure of
third  parties to  achieve  Year 2000  readiness.   The  plan includes  the
following activities:  (1) identify and classify  third party dependencies;
(2)  research, analyze, and document Year 2000 readiness for critical third
parties;   and  (3)  test  critical  hardware  and  software  products  and
electronic  interfaces.  As of  September 30, 1998,  the identification and
classification activities are substantially  complete.  The Company expects
to substantially  complete the  research  and  analysis of  critical  third
parties'  Year 2000 readiness  by December  31, 1998.  Due to  the  various
stages  of third  parties'  Year 2000  readiness,  testing  activities will
extend through 1999.

Contingency Plan.  The Company has commenced contingency planning to reduce
the  risk of  Year 2000-related  business failures.  The contingency  plan,
which  addresses  both  internal  systems and  third  party  relationships,
includes the following activities: (1) evaluate the consequences of failure
of business  processes  with significant  exposure to  Year 2000  risk; (2)
determine  the  probability  of  a  Year  2000-related  failure  for  those
processes  that  have a  high consequence of failure; (3) develop an action
plan to  complete  contingency plan  for those processes  that rank high in
both  consequence   and  probability  of  failure;  and  (4)  complete  the
applicable action plan.  The Company has substantially completed evaluation
activities as of  September 30, 1998 and is proceeding  with the subsequent
activities.  The Company expects to substantially  complete all contingency
planning activities by April 30, 1999.
<PAGE>
<PAGE> 11

Risks and Uncertainties.  Based on  its plan to make internal systems ready
for  Year  2000, to  deal with  third party  relationships, and  to develop
contingency actions, the Company  believes that it will experience  at most
isolated and  minor disruptions of business processes following the turn of
the century.  Such disruptions are not expected to have  a material  effect
on  the  Company's future results  of operations,  liquidity,  or financial
condition.   However, due to the magnitude and  complexity of this project,
risks and uncertainties exist and the Company is not able to predict a most
reasonably  likely  worst  case  scenario.  If conversion  of the Company's
internal systems is not completed on a timely basis (due to non-performance
by significant third-party vendors, lack of qualified personnel  to perform
the Year 2000  work, or other  unforeseen  circumstances in  completing the
Company's plan), or  if critical third parties  fail to  achieve Year  2000
readiness  on a  timely basis,  the Year 2000 issues could have  a material
adverse  impact  on the  Company's  operations  following  the turn  of the
century.

Costs.  Through  September 30, 1998, the Company  has incurred and expensed
$3.6  million  (pretax) related  to  Year  2000 readiness,  including  $2.9
million  incurred  during  the first  nine  months  of 1998.    The Company
currently anticipates that it will incur future costs of approximately $3.7
million (pretax) for  additional internal staff,  third-party vendors,  and
other expenses to  achieve Year 2000  readiness.  In addition,  the Company
has elected to  accelerate the  planned replacement of  certain systems  as
part of the  Year 2000 plan.   Costs of  the replacement  systems are being
capitalized and amortized  over their useful  lives, recorded as  operating
leases, or expensed  as incurred  in accordance with  the Company's  normal
accounting policies.   The Company currently  anticipates total replacement
costs of $2.1 million.
<PAGE>
<PAGE> 12

                       SELECTED FINANCIAL INFORMATION


The following table shows selected financial information of the Company:

                                 At or for the            At or for the
                              Three Months Ended        Nine Months Ended
                                 September 30,            September 30,    
                             1998            1997     1998            1997 
                                        (dollars in thousands)
Average finance receivables 
  net of unearned finance
  charges (average net
  receivables)              $8,494,989  $7,266,025   $8,124,103  $7,300,959

Average borrowings          $7,768,517  $6,616,365   $7,418,940  $7,001,072

Yield - finance charges
  (annualized) as a
  percentage of average
  net receivables               15.73%      16.82%       16.09%      16.95%

Borrowing cost - interest
  expense (annualized) as 
  a percentage of average
  borrowings                     6.56%       6.93%        6.63%       6.83%

Interest spread - yield
  less borrowing cost            9.17%       9.89%        9.46%      10.12%

Insurance revenues
  (annualized) as a
  percentage of average
  net receivables                2.09%       2.56%        2.16%       2.57%

Operating expenses
  (annualized) as a
  percentage of average
  net receivables                5.98%       6.42%        6.14%       6.31%

Return on average assets 
  (annualized)                   1.95%       2.00%        1.96%       1.48%

Return on average equity
  (annualized)                  13.25%      13.23%       13.24%      10.02%

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              2.44%       3.28%        2.59%       3.61%
<PAGE>
<PAGE> 13

Selected Financial Information (Continued)


                                                       At or for the
                                                     Nine Months Ended
                                                       September 30,  
                                                     1998        1997 

Allowance ratio - allowance for finance
  receivable losses as a percentage of
  net finance receivables                            4.12%       5.05%

Ratio of earnings to fixed charges (refer
  to Exhibit 12 for calculations)                    1.60        1.44

Delinquency ratio - finance receivables 60
  days or more past due as a percentage of
  related receivables                                3.77%       3.85%

Debt to tangible equity ratio - debt to
  equity less goodwill and net unrealized
  gains or losses on fixed-maturity
  investment securities                              6.49        6.45

Debt to equity ratio                                 5.22        5.06



                       ANALYSIS OF OPERATING RESULTS


Net Income

Net  income increased  $5.8 million,  or 13%,  for  the three  months ended
September 30,  1998 and $41.0  million, or 40%,  for the nine  months ended
September 30,  1998 when compared  to the  same periods in  1997 reflecting
lower net charge-offs and finance  receivable growth.  The increase in  net
income for the nine months ended September 30, 1998 also reflected the loss
on the sale of non-strategic assets during second quarter 1997.

During the past several years, 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 nine  months of 1998.
The charge-off ratio  improved 102 basis points  for the nine  months ended
September 30, 1998  when compared to  the same period  in 1997, which  more
than offset the decline in yield of 86 basis points.
<PAGE>
<PAGE> 14

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


Finance Charges

Finance  charge  revenues increased  $28.6 million,  or  9%, for  the three
months ended  September 30,  1998 and  $52.4 million, or  6%, for  the nine
months ended September 30, 1998  when compared to the same periods  in 1997
due to increases in  average net receivables, partially offset  by declines
in yield.  Average net receivables  increased $1.2 billion, or 17%, for the
three months ended September 30,  1998 and $823.1 million, or 11%,  for the
nine  months ended September 30, 1998 when  compared to the same periods in
1997 primarily due to growth in real estate loans.  The increase in average
net receivables  for the nine months ended September 30, 1998 was partially
offset  by the sale of certain private  label receivables in second quarter
1997.    Yield decreased  109  basis  points  for  the three  months  ended
September 30,  1998 and 86 basis points for the nine months ended September
30, 1998 when  compared to the  same periods 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  $2.1 million,  or 5%,  for the  three months
ended September 30, 1998 and $9.1 million, or 6%, for the nine months ended
September 30, 1998 when compared to the same periods in  1997 primarily due
to decreases 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 decreased $.6  million, or 3%,  for the three  months ended
September  30, 1998 and increased $4.7 million,  or 7%, for the nine months
ended September  30, 1998 when compared  to the same periods in  1997.  The
increase in other revenues for the nine months ended September 30, 1998 was
primarily due to  an increase  in investment revenue  reflecting growth  in
average  invested  assets,  partially  offset  by  a  decline  in  adjusted
portfolio yield.


Interest Expense

Interest  expense increased  $13.0 million,  or 11%,  for the  three months
ended  September 30, 1998  and $34.0 million,  or 10%, for  the nine months
ended September  30, 1998 when compared to the  same periods in 1997 due to
increases in average borrowings  to support asset growth, partially  offset
by  declines in borrowing  cost.  Borrowing cost  decreased 37 basis points
for the three months  ended September 30, 1998 and 20  basis points for the
nine months ended  September 30, 1998 when compared to  the same periods in
1997.
<PAGE>
<PAGE> 15

Operating Expenses

Operating expenses increased  $10.4 million,  or 9%, for  the three  months
ended September  30, 1998  and $28.4  million, or 8%,  for the  nine months
ended  September 30,  1998  when  compared  to the  same  periods  in  1997
primarily  due to increases in  salaries and benefits, litigation expenses,
amortization of intangibles, and advertising expenses, partially offset  by
an increase in  deferred loan acquisition costs.  The  increase in salaries
and benefits expense  reflects an increase  in incentive program  expenses,
partially offset  by a workforce  reduction of approximately  330 positions
since September 30,  1997 which  includes the effects  of cost  containment
programs and the  sale of  the non-strategic assets  during second  quarter
1997.  


Provision for Finance Receivable Losses

Provision  for finance receivable losses decreased $2.9 million, or 5%, for
the three  months ended September 30,  1998 and $33.1 million,  or 18%, for
the nine  months ended September 30, 1998 when compared to the same periods
in 1997 due to decreases in net charge-offs totaling $7.9 million and $40.6
million, respectively.

Net charge-offs for the three months  ended September 30, 1998 decreased to
$51.5 million from $59.4 million  for the same period in 1997.  The charge-
off ratio  for third quarter  1998 was  2.44% compared to  3.28% for  third
quarter 1997.   

At September 30, 1998, delinquencies were $347.3 million compared to $305.9
million at September 30, 1997.  The delinquency ratio at September 30, 1998
was  3.77% compared to  3.85% at September  30, 1997.  The  decrease in the
delinquency  ratio from  September 30,  1997 reflected  the results  of the
Company's  efforts  to  improve  credit  quality.    The  delinquency ratio
increased from  3.45% at  June 30, 1998  reflecting the effects  of general
economic  conditions, as  well  as the  maturing  of purchased  real-estate
portfolios which were primarily new originations when purchased.

At  September 30,  1998, the  allowance for  finance receivable  losses was
$355.6  million compared  to $370.6  million at  September  30, 1997.   The
allowance  ratio  at September  30, 1998  was  4.12% compared  to  5.05% at
September  30, 1997.    The Company  maintains  the allowance  for  finance
receivable  losses at a  level based on periodic  evaluation of the finance
receivable  portfolio  which  reflects  an  amount  that,  in  management's
opinion,  is  adequate  to  absorb   anticipated  losses  in  the  existing
portfolio. 


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
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.
<PAGE>
<PAGE> 16

Insurance Losses and Loss Adjustment Expenses

Insurance losses  and loss adjustment  expenses decreased $2.8  million, or
12%, for the three months ended September 30, 1998 and $4.7 million, or 7%,
for  the nine  months ended September  30, 1998  when compared  to the same
periods in  1997 due to decreases  in claims paid and  provision for future
benefits.   Claims decreased  $2.2 million and  $3.3 million, respectively,
primarily due to  lower earned  premiums and favorable  loss experience  on
credit  insurance.  Provision for future benefits decreased $.6 million and
$1.4  million, respectively, due  to reduced sales  of non-credit insurance
products.    


Provision for Income Taxes

The provision for income taxes increased $2.2 million, or 9%, for the three
months ended September  30, 1998 and  $24.8 million, or  42%, for the  nine
months ended September  30, 1998 when compared to the  same periods in 1997
primarily due to higher taxable income.  


Forward-looking Statements

All statements,  trend analyses,  and other  information contained  in this
report  and  elsewhere (such  as  other  filings by  the  Company with  the
Securities  and  Exchange  Commission,  press  releases,  presentations  by
management of the  Company, or oral statements)  relative to trends in  the
Company's  operations or  financial results,  as well  as other  statements
including  words  such  as  "anticipate,"  "believe,"  "plan,"  "estimate,"
"expect,"  "intend," and  other  similar  expressions, constitute  forward-
looking  statements under the  Private Securities Litigation  Reform Act of
1995.  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:   (1)  changes  in  general economic
conditions, including the performance of financial markets, interest rates,
and the level of personal bankruptcies; (2) competitive, regulatory, or tax
changes that affect the cost  of or demand for the Company's  products; (3)
the Company's ability to achieve  Year 2000 readiness  for critical systems
and  operations  on a  timely  basis;  (4) adverse  litigation  results  or
resolution  of  litigation;  and  (5)  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
other  documents  filed by  the Company  with  the Securities  and Exchange
Commission.   The Company undertakes no  obligation to update or revise any
forward-looking information, whether as a result of new information, future
developments, or otherwise.
<PAGE>
<PAGE> 17

                        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  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  certain jurisdictions
continues  to create  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  9, 1998, with  respect to the
     authorization for issuance of $200 million aggregate principal  amount
     of the Company's 5 7/8% Senior Notes due July 15, 2001.

     Current Report  on Form 8-K dated  July 28, 1998, with  respect to the
     issuance of an Earnings Release announcing certain unaudited financial
     results of the Company for the quarter ended June 30, 1998.

     Current Report on Form 8-K dated October 28, 1998, with respect to the
     issuance of an Earnings Release announcing certain unaudited financial
     results of the Company for the quarter ended September 30, 1998.

     Current Report on Form 8-K dated October 30, 1998, with respect to the
     authorization for issuance of $400 million aggregate principal  amount
     of the Company's 5 3/4% Senior Notes due November 1, 2003.
<PAGE>
<PAGE> 18

                                 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 12, 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> 19

                               Exhibit Index



      Exhibits                                                      Page

(12)  Computation of Ratio of Earnings to Fixed Charges.             20

(27)  Financial Data Schedule.                                       21
<PAGE>