Distinguishing between psychological and mental problems is significant in that the two adjectives carry different meanings and levels of stigma in society.
Mental problems are identified based on experience and observation of a variety of symptoms that culminate in a psychiatric diagnosis. With psychological problems, the clinician formulates a hypothesis based on symptoms in addition to social and environmental factors affecting the patient.
Suffering from psychological problems is perceived to be a result of environmental factors or social circumstances. This perception places responsibility on external factors that are beyond the person's control.
Mental problems are perceived to be caused by individual weakness or genetic faults. This perception places the blame for the problem on internal factors that the patient should be responsible for controlling.
Describing an individual's problem as "psychological" allows respect for spiritual, religious and cultural practices that are outside the norm. Describing the problem as "mental" causes stigma that is sometimes associated with incompetence, crime or violence.
Psychological and mental are terms that are used interchangeably to describe similar issues. Both types of problems interfere with the levels at which a person functions. However, these terms are often perceived in different ways and may affect how an individual with such problems is treated.