Psychological horror
Psychological horror is a subgenre of horror that uses the characters' internal psychological fears and beliefs to create a sense of horror.
Psychological horror works may or may not include fantastic or unreal elements. The horror may be solely in the mind of the narrator (especially if an unreliable narrator or a mad or insane narrator), or it may be based on the character's natural and normal response to an abnormal and horrific situation. However, if the latter, a work of psychological horror derives at least a substantial part of the audience/reader's sense of horror from the confusion, fear, anxiety, and other psychological/emotional responses of the character/protagonist, and not solely from the horrific nature of the actions or environment the character finds itself in.