First off, a pure psychological horror VN that burrows into your head is 'Saya no Uta'. It’s less about jump scares and more about this profound, creeping distortion of reality and morality through the protagonist’s perception. The horror is in the slow realization that you, as the player, might be sympathizing with something truly monstrous. The art and sound design are instrumental in building that feeling of a world that’s subtly, terminally wrong.
Another stellar example is 'The House in Fata Morgana'. It’s a gothic tragedy that uses its visual novel format to layer mystery upon mystery across centuries. The psychological terror comes from the unraveling of the mansion’s curse and the deep, human agonies that created it. You’re not just scared of a ghost; you’re devastated by the cycles of betrayal, jealousy, and love that bind everyone there. It’s emotionally draining in the best way.
For a more modern, interactive nightmare, 'Raging Loop' deserves a shout. It traps you in a village with a deadly secret and a werewolf game. The thriller element is front and center with constant paranoia and deduction, but the real psychological weight hits as the protagonist is forced to relive scenarios, his memories fracturing and his sanity slipping with each loop. The dread of inevitability and the cost of knowledge are palpable.
Don’t overlook 'Chaos;Child' either, the successor to 'Chaos;Head'. It builds a detective story around a series of bizarre murders, but the true core is the protagonist’s own fragile psyche and the unreliability of his perceptions. The ‘delusion’ system directly plays with this, letting you choose to see comforting or terrifying interpretations of events, which brilliantly implicates you in the character’s mental disintegration.