Last night, viewers saw mentor Cheryl Cole choose the 17-year-old as one of her three finalists alongside Katie Waissel and Rebecca Ferguson.
According to The Sun, some mental health experts have questioned the decision to put Lloyd through.
Claude Knights, director of under-18s charity Kidscape said: "It sounds like she's too vulnerable - further exposure seems quite risky and foolhardy."
She added: "If you're that fragile, there is no way she can judge the long-term effects. They could be physical and mental problems and very, very concerning."
Now, round-the-clock support will apparently be available for the singer.
"Cher's close to the edge, constantly in tears," a source told the paper. "She needs someone there all the time.
"A trained counsellor will be on standby 24/7. Whenever she needs someone to talk to they'll be there."
They added: "They can't afford Cher's wellbeing to deteriorate any further."
Other mental health charities have backed the decision to let Lloyd compete.
"It's entirely possible for people with mental health issues to take part in such shows," a spokesman for mental health charity Rethink said.
"We'd support anybody who wanted to go on. It's important people are able to follow their dreams. It could be very rewarding and beneficial for them. There just needs to be the right support."
A spokesperson for Mind added: "I'm glad to hear they have a counsellor. We wouldn't want people with mental health problems excluded from talent programmes."
An X Factor spokesman said: "Contestants' welfare is paramount and we are keeping a close eye on the young ones.
"There are members of production in the house at all times and a counsellor is available."
> X Factor Cher 'bullied at school'