The Internet of Things (IoT) is transforming mental healthcare by enabling the continuous tracking of physiological and behavioral indicators, improving the precision, responsiveness, and personalization of mental health treatment. Unlike conventional mental health assessments based on infrequent clinical visits or subjective reporting, IoT offers real-time, data-driven insights through wearable technologies, ambient sensors, and cloud-based applications. With the help of Artificial Intelligence (AI) and Machine Learning (ML), these systems can analyze patterns in speech, sleep, movement, and physiological signals to detect anomalies, predict crises, and deliver timely interventions. The study presents a holistic review of how IoT enhances mental health monitoring, with a focus on secure communication, privacy-preserving mechanisms, and AI-powered analytics. It also explores emerging trends like neurotechnology, smart fabrics, and immersive therapy via virtual reality (VR). The potential for tailored mental healthcare and robust cybersecurity practices is emphasized throughout.