Electric vehicles (EV) replacing the internal combustion engine vehicle may be the solution for the particulate matter (PM) 2.5 pollution issue. However, the uncontrolled charging of EVs would challenge the power system operation. Therefore, it is necessary to implement some level of control over the EV charging procedure, especially in the residential network. In this paper, an optimization of EVs charging scheduling considering energy arbitrage and the distribution network cost of an urban village environment is presented. The optimized strategy focuses on decreasing the loss of EV owners’ energy arbitrage benefit, introduced as the penalty cost. Also, peak demand, power loss, and transformer aging are included in the estimation of the cost function for the distribution network. The optimization problem is solved using the genetic algorithm. As a case study, data from the urban village in Udon Thani, Thailand, are utilized to demonstrate the applicability of the proposed method. Simulation results show a reduction in the loss of energy arbitrage benefit, transformer peak load, power loss and the transformer loss of life. Therefore, the application of the optimized EV charging can prolong transformer lifetime benefiting both the EV owner and the distribution system operator.