In this article we extend the Banach contraction principle known in the framework of rectangular metric spaces (θ-contraction) to the more general rectangular M-metric spaces. We also investigate the existence and uniqueness of fixed point for mappings satisfying θ-contraction in rectangular M-metric spaces. Moreover, we provide some examples to highlight the obtained improvements. Finally, as an application, we investigate the existence and uniqueness of a solution of a non-linear integral equation of Fredholm type.