Some things you should consider:
- Usually you can only make a balance transfer from one credit card to another, and not from other personal loans. As your current credit card debt is $17K you would only be able to transfer this amount to the Citibank 2 year interest free card.
- With the Citibank 2 year interest free card you can only transfer up to 80% of your credit limit with this card. This means you will need to be approved for a credit limit of at least $21,250 to be able to transfer your total $17K current credit card debt. Do you earn enough income to get this limit approved.
- The Citibank 2 year interest free card comes with a 3% balance transfer fee. For your intended $17K balance transfer this would be a fee of $510.
- After the 2 years interest free period the interest rate on this card reverts to 21.74% p.a. (or higher if official interest rates rise in that 2 year period). So for any balance you have not paid off in the 2 years you will be paying more for than at you current interest rate of 16%.
- To pay off the $17K in 2 years you will need to pay $163.50 every week plus the $510 balance transfer fee at the start.
If you get approved for the Citibank 2 year interest free credit card on balance transfers, you will need another loan of $18K to consolidate your other debt. If you cannot get approval for the credit card you may need to get consolidation loan approval for your full $35K of debt. This approval again will depend on your income and your ability to make repayments. As it sounds like you don't have any assets, you may have to get an unsecured loan which comes with higher interest rates.
Remember a consolidation loan is only worthwhile if you can get an interest rate lower than your current interest rates and if you pay as much as possible to reduce the term of the loan and the total interest you end up paying.
You haven't given the interest rate for the consolidation loan, but lets assume you could get one at 12% p.a. over a 3 year period. For a loan of $18K you would have to pay $138 per week. Together with the $163.50 per week you would have to pay the credit card balance transfer, your total repayments per week for the first 2 years would be $301.50, then $138 per week for the 3rd year. This option sounds affordable, but without knowing what your income and current expenses are it is hard for others to determine for sure.
If you had to get a consolidated loan for the full $35K at say 12% p.a. then your weekly repayments would be $268.30 over a 3 year period. This looks to be achievable too.
As you said you will need to be very disciplined in order to get out of this debt. You will need to set up a proper budget and watch every dollar you spend. You will need to restrict any spending on credit cards and getting any new personal loans.
You say you will keep a small credit limit to pay for ongoing online payments for courses. Make sure you uses a 55 day interest free credit card (preferably with no annual fee) for this and pay the full amount due every month, so you don't end up paying any more interest on this card.
In case of death would my debts pass on to my next of kin or family?
If your debts are unsecured (which personal loans and credit cards are), then no your next of kin or family will not have to pay your debts if you die. When you die any money or assets (which would be sold) in your estate will first be used to pay off any of your debts. If there is not enough money or assets in your estate then your remaining debts may not need to be paid.
Other people are only responsible for paying your debts after you die if:
- the debt is secured against a particular asset owned by someone else
- the debt is in joint names with someone else
- someone has guaranteed the debt.
An alternative to Bankruptcy is a Part 9 debt agreement, as I mentioned in my answer to your previous question. In this case you will still need to pay off at least part of the debt but will not be charged any further interest on the debt. This is not as severe as Bankruptcy, but as I mentioned before, should not be taken lightly. Like bankruptcy, a debt agreement will appear on your credit file for seven years and your name will be listed on the National Personal Insolvency Index forever. Bankruptcy or a Debt Agreement should only be used as a last resort if you are unable to undertake any other option. And remember, even if you do take this course of action, you will still need to be disciplined now and into the future, so you don't end up in a similar situation again.